Find the future values of the following ordinary annuities FV of $400 paid each 6 months for 5 years at a nominal rate of 7 compounded semiannually Do not round intermediate calculations Round your answer to the nearest cent $ FV of $200 paid each 3 months for 5 years at a nominal rate of 7 compounded quarterly Do not round intermediate calculations Round your answer to the nearest cent $ These annuities receive the same amount of cash during the 5 year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a Why does this occur Select The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a) The annuity in part (a) is compounded less frequently therefore, more interest is earned on previously earned interest The annuity in part (a) is compounded more frequently therefore, more interest is earned on previously earned interest The annuity in part (b) is compounded less frequently therefore, more interest is earned on previously earned interest The annuity in part (b) is compounded more frequently therefore, more interest is earned on previously earned interest Item 3

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Posted on Oct 07, 2024

Find the future values of the following ordinary annuities:

FV of $400 paid each 6 months for 5 years at a nominal rate of 7% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

$
FV of $200 paid each 3 months for 5 years at a nominal rate of 7% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

$
These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? -Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded more frequently; therefore, more interest is earned on previously-earned interest.Item 3