BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Solutions

Chapter
Section
BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Use Table 12-2 to calculate the present value of the following annuities due.

Annuity Payment Time Nominal Interest Present Value
Payment Frequency Period (years) Rate(%) Compounded of the Annuity
6. $125,000 every 3 months 3 6 quarterly

To determine

To calculate: The present value of ordinary annuities where annuity payment is $125,000, frequency of payment is 3 months, time duration is 3 years, nominal rate of return is 6% and interest is compounded quarterly.

Explanation

Given Information:

Annuity payment is $125,000, frequency of payment is 3 months, time duration is 3 years, nominal rate of return is 6% and interest is compounded quarterly.

Formula used:

Steps for calculating the present value of an ordinary annuity are:

Step1: First the interest rate per period for the annuity is calculated.

Step2: The number of annuity periods should then be determined.

Step 3: Use table 12-2 to locate the ordinary annuity table factor that lies on the intersection of the rate-per period column and number-of-periods row.

Step 4: Finally present value of the ordinary annuity is calculated.

The formula to compute the present value of ordinary annuity is,

Present Value=Ordinary annuity table factor×Annuity payment

Calculation:

Consider that annuity payment is $125,000, frequency of payment is 3 months, time duration is 3 years, nominal rate of return is 6% and interest is compounded quarterly.

As the interest is compounded quarterly. So, the interest rate period is;

6%4=1

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 12 Solutions

Show all chapter solutions add
Sect-12.I P-8RESect-12.I P-9RESect-12.I P-10RESect-12.I P-11RESect-12.I P-12RESect-12.I P-13RESect-12.I P-14RESect-12.I P-15RESect-12.I P-16RESect-12.I P-17RESect-12.I P-18RESect-12.I P-19RESect-12.I P-20RESect-12.I P-21RESect-12.I P-22RESect-12.I P-23RESect-12.I P-24RESect-12.II P-4TIESect-12.II P-5TIESect-12.II P-6TIESect-12.II P-1RESect-12.II P-2RESect-12.II P-3RESect-12.II P-4RESect-12.II P-5RESect-12.II P-6RESect-12.II P-7RESect-12.II P-8RESect-12.II P-9RESect-12.II P-10RESect-12.II P-11RESect-12.II P-12RESect-12.II P-13RESect-12.II P-14RESect-12.II P-15RESect-12.II P-16RESect-12.II P-17RESect-12.II P-18RESect-12.II P-19RESect-12.II P-20RESect-12.II P-21RESect-12.II P-22RESect-12.II P-23RESect-12.II P-24RESect-12.III P-7TIESect-12.III P-8TIESect-12.III P-9TIESect-12.III P-10TIESect-12.III P-1RESect-12.III P-2RESect-12.III P-3RESect-12.III P-4RESect-12.III P-5RESect-12.III P-6RESect-12.III P-7RESect-12.III P-8RESect-12.III P-9RESect-12.III P-10RESect-12.III P-11RESect-12.III P-12RESect-12.III P-13RESect-12.III P-14RESect-12.III P-15RESect-12.III P-16RESect-12.III P-17RESect-12.III P-18RESect-12.III P-19RESect-12.III P-20RESect-12.III P-21RESect-12.III P-22RESect-12.III P-23RESect-12.III P-24RESect-12.III P-25RECh-12 P-1CRCh-12 P-2CRCh-12 P-3CRCh-12 P-4CRCh-12 P-5CRCh-12 P-6CRCh-12 P-7CRCh-12 P-8CRCh-12 P-9CRCh-12 P-10CRCh-12 P-11CRCh-12 P-12CRCh-12 P-13CRCh-12 P-14CRCh-12 P-1ATCh-12 P-2ATCh-12 P-3ATCh-12 P-4ATCh-12 P-5ATCh-12 P-6ATCh-12 P-7ATCh-12 P-8ATCh-12 P-9ATCh-12 P-10ATCh-12 P-11ATCh-12 P-12ATCh-12 P-13ATCh-12 P-14ATCh-12 P-15ATCh-12 P-16ATCh-12 P-17ATCh-12 P-18ATCh-12 P-19ATCh-12 P-20ATCh-12 P-21ATCh-12 P-22ATCh-12 P-23ATCh-12 P-24ATCh-12 P-25ATCh-12 P-26ATCh-12 P-27ATCh-12 P-28ATCh-12 P-29ATCh-12 P-30ATCh-12 P-31ATCh-12 P-32ATCh-12 P-33ATCh-12 P-34ATCh-12 P-35AT

Additional Math Solutions

Find more solutions based on key concepts

Show solutions add

Multiply: (9)(7)

Elementary Technical Mathematics

Outsourcing of Jobs According to a study conducted in 2003. the total number of U.S. jobs (in millions) that ar...

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

Find the point on the hyperbola xy = 8 that is closest to the point (3, 0).

Single Variable Calculus: Early Transcendentals, Volume I

For f(x)=x2+x, we may write f (x) = (h g)(x), where: a) h(x)=x and g(x) = x2 + x b) h(x) = x2 + x and g(x)=x c...

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th

A normal vector to the plane 2x + 3y + 6z =–20 is:

Study Guide for Stewart's Multivariable Calculus, 8th

In Exercises 1-18, construct a truth table for each compound proposition. (pq)(~pq)

Finite Mathematics for the Managerial, Life, and Social Sciences