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Find the amount to which $800 will grow under each of these conditions:

4% compounded annually for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

4% compounded semiannually for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

4% compounded quarterly for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

4% compounded monthly for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

4% compounded daily for 10 years. Assume 365-days in a year. Do not round intermediate calculations. Round your answer to the nearest cent.

$

Why does the observed pattern of FVs occur?

Find the present value of $300 due in the future under each of these conditions:

15% nominal rate, semiannual compounding, discounted back 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

15% nominal rate, quarterly compounding, discounted back 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

$

15% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent.

$

Why do the differences in the PVs occur?

Find the future values of the following ordinary annuities:

FV of $700 paid each 6 months for 5 years at a nominal rate of 8% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

$

FV of $350 paid each 3 months for 5 years at a nominal rate of 8% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

$

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?

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