Find the future values of the following ordinary annuities:a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannuallyb. FV of $200 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterlyc. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
Find the future values of the following ordinary annuities:a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannuallyb. FV of $200 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterlyc. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 20E
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Find the
a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannually
b. FV of $200 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterly
c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the
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