Tum al Exerc e Suppose that your bank pays 5% interest, compounded quarterly. Use Table 12-2 to nd how much should be deposited now to yieid an annuity payment or $1,600 at the end or each three months. ror a years. The present vaiue of an annuity is the amount needed new so that desired annuiw payments may be made in the future. since payments wiii he made at the end or each three months, this is an ordinary annuity. To nd the present value of this annuity. the amount ormoney that should be deposited in an account now, the interest rate per period rnust lirst be round. The interest rate per period is calculated using the nominal, or annual. rate and the number or periods per year as roilows. nominal lite interest rate per period = _ periods per year The rate was given to be 5%. Interest is compounded quarterly, ur4 times per year Find the interest rate per period. nominal late periods per year _:% The total number of compounding periods Will be the number of years interest wili accrue multiplied by the number of compounding periods per year. There are 4 compounding periods per year and annuity payments wiil he made for 3 years. Find the total number uf periods of the annuity. interest rate per period total number or annuity periods = number or years x number of compounding periods per year :: Submit lly-nu cannot Dome back)