Future Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities FV of $200 each 6 months for 8 years at a nominal rate of 16 , compounded semiannually Do not round intermediate calculations Round your answer to the nearest cent $ FV of $100 each 3 months for 8 years at a nominal rate of 16 , compounded quarterly Do not round intermediate calculations Round your answer to the nearest cent $ The annuities described in parts a and b have the same amount of money paid into them during the 8 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 8 years Why does this occur The answers for the drop down in c are The nominal deposits into the annuity in part (b) are greater then the nominal deposits into he annuity in part (a) The annuity in part (a) is compounded less frequently therefore, more interest is earned on interest The annuity in part (a) is compounded more frequently therefore, more interest is earned on interest The annuity in part (b) is compounded less frequently therefore, more interest is earned on interest The annuity in part (b) is compounded more frequently therefore, more interest is earned on interest

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Future Value of an Annuity for Various Compounding Periods

Find the future values of the following ordinary annuities.

FV of $200 each 6 months for 8 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

$
FV of $100 each 3 months for 8 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

$
The annuities described in parts a and b have the same amount of money paid into them during the 8-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 8 years. Why does this occur?

The answers for the drop down in c. are

The nominal deposits into the annuity in part (b) are greater then the nominal deposits into he annuity in part (a)

The annuity in part (a) is compounded less frequently; therefore, more interest is earned on interest.

The annuity in part (a) is compounded more frequently; therefore, more interest is earned on interest.

The annuity in part (b) is compounded less frequently; therefore, more interest is earned on interest.

The annuity in part (b) is compounded more frequently; therefore, more interest is earned on interest