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
8. $2,000 every 6 months 6 4 semiannually

To determine

To calculate: The present value of annuities due where annuity payment is $2,000, frequency of payment is 6 months, time duration is 6 years, nominal rate of return is 4% and interest is compounded semiannually.

Explanation

Given Information:

Annuity payment is $2,000, frequency of payment is 6 months, time duration is 6 years, nominal rate of return is 4% and interest is compounded semiannually.

Formula used:

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

Step 1: Calculate the number of periods of the annuity and subtract one period to total.

Step 2: The interest rate per period must be calculated.

Step 3: Use table 12.2 to locate the table factor that lies on the intersection of the rate-per period column and number-of-periods row.

Step 4: The number 1.00000 must be added to the ordinary annuity table in order to get the annuity due factor.

Step 5: Finally calculate the present value of the annuity due.

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

Present Value=Annuity due table factor×Annuity payment

Annuity due table factor=Ordinary annuity table factor+1.00000

Calculation:

Consider that annuity payment is $2,000, frequency of payment is 6 months, time duration is 6 years, nominal rate of return is 4% and interest is compounded semiannually.

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

4%2=2%

The rate period is 2%

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

In Exercises 90-98, determine whether the statement is true or false. If it is true, explain why it is true. If...

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

In Exercises 21 to 24, ADEABC. Given: DE=4,AE=6,EC=BC Find: BC

Elementary Geometry For College Students, 7e

What is the lowest score in the following distribution?

Essentials of Statistics for The Behavioral Sciences (MindTap Course List)

Use series to evaluate the limit. 65. limx0x33x+3tan1xx5

Single Variable Calculus: Early Transcendentals

Find the perimeter of the cyclic quadrilateral shown.

Elementary Geometry for College Students

In Exercises 1-10, determine which of the matrices are stochastic. [.2.3.3.1.5.6]

Finite Mathematics for the Managerial, Life, and Social Sciences

True or False: In the definition of , the expression is interpreted as “the distance between f(x) and L is les...

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

True or False: converges.

Study Guide for Stewart's Multivariable Calculus, 8th

What is the general purpose for using a simulation or a field study for experimental research?

Research Methods for the Behavioral Sciences (MindTap Course List)