Future Value for Various Compounding Periods

Find the amount to which $350 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

1. 6% compounded annually for 5 years.

   $

2. 6% compounded semiannually for 5 years.

   $

3. 6% compounded quarterly for 5 years.

   $

4. 6% compounded monthly for 5 years.

   $

Present Value for Various Compounding Periods

Find the present value of $775 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

1. 12% nominal rate, semiannual compounding, discounted back 5 years.

   $

2. 12% nominal rate, quarterly compounding, discounted back 5 years.

   $

3. 12% nominal rate, monthly compounding, discounted back 1 year.

   $

Future Value of an Annuity for Various Compounding Periods

Find the future values of the following ordinary annuities.

1. FV of $200 each 6 months for 10 years at a nominal rate of 8%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

2. FV of $100 each 3 months for 10 years at a nominal rate of 8%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

3. The annuities described in parts a and b have the same amount of money paid into them during the 10-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 10 years. Why does this occur?