Question
Find the PV of an ordinary annuity that pays $1,000 each of the next 4 years if the interest rate is 14%. Then find the
Find the PV of an ordinary annuity that pays $1,000 each of the next 4 years if the interest rate is 14%. Then find the FV of that same annuity. Round your answers to the nearest cent.
PV of ordinary annuity: $ FV of ordinary annuity: $
g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent.
PV of annuity due: $ FV of annuity due: $
h. What will the FV and the PV for parts a and c be if the interest rate is 8% with semiannual compounding rather than 8% with annual compounding? Round your answers to the nearest cent.
FV with semiannual compounding: $ PV with semiannual compounding: $
i. Find the annual payments for an ordinary annuity and an annuity due for 8 years with a PV of $1,000 and an interest rate of 6%. Round your answers to the nearest cent.
Annual payment for ordinary annuity: | $ |
Annual payment for annuity due: | $ |
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