Find the future values of these ordinary annuities . Compounding occurs once a y

Question

Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.

Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.

$600 per year for 16 years at 8%.

$  

$300 per year for 8 years at 4%.

$  

$900 per year for 4 years at 0%.

$  

$600 per year for 16 years at 8%.

$  

$300 per year for 8 years at 4%.

$  

$900 per year for 4 years at 0%.

$  

Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.

Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.

$600 per year for 16 years at 8%.

$  

$300 per year for 8 years at 4%.

$  

$900 per year for 4 years at 0%.

$  

$600 per year for 16 years at 8%.

$  

$300 per year for 8 years at 4%.

$  

$900 per year for 4 years at 0%.

$  

Explanation / Answer

Ordinary annuity is investment is made at the end of the year where as annuity due is when investment is made at eh beginning of the year

Future value can be calculated in excel using the below formuals

=FV(Rate,NPER,PMT,PV,0or1)

Here rate is interest rate

NPER is number of investments made

PMT is investment made value

PV is present value of investment

0 is for ordinary annuity where as 1 is for annuity due

All FV's are calculated in excel with above formula are as follows

Per Year Investment Years Interest rate Ordinary Annuity Annuity Due 1 -600 16 8% $18,194.57 $19,650.14 2 -300 8 4% $2,764.27 $2,874.84 3 -900 4 0% $3,600.00 $3,600.00

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