Future Value of an Annuity for Various Compounding PeriodsFind the future values of the following ordinary annuities.FV of $600 each 6 months for 4 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$ FV of $300 each 3 months for 4 years at a nominal rate of 12%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$ The annuities described in parts a and b have the same amount of money paid into them during the 4-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 4 years. Why does this occur?

In this we have to calculate future value FACTOR and than get the future value.

Answered: Future Value of an Annuity for Various…

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

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Future Value of an Annuity for Various Compounding Periods

Find the future values of the following ordinary annuities.

FV of $600 each 6 months for 4 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

$
FV of $300 each 3 months for 4 years at a nominal rate of 12%, 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 4-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 4 years. Why does this occur?

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