Problem 4-12 Future Value of an Annuity Find the future value of the following annuities. The first payment...

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Finance

Problem 4-12
Future Value of an Annuity
Find the future value of the following annuities. Thefirst payment in these annuities is made at the end ofYear 1, so they are ordinary annuities. Round your answersto the nearest cent. (Notes: If you are using a financialcalculator, you can enter the known values and then press theappropriate key to find the unknown variable. Then, withoutclearing the TVM register, you can "override" the variable thatchanges by simply entering a new value for it and then pressing thekey for the unknown variable to obtain the second answer. Thisprocedure can be used in many situations, to see how changes ininput variables affect the output variable. Also, note that you canleave values in the TVM register, switch to Begin Mode, press FV,and find the FV of the annuity due.)
$400 per year for 10 years at 12%.
$
$200 per year for 5 years at 6%.
$
$400 per year for 5 years at 0%.
$
Now rework parts a, b, and c assuming that payments are made atthe beginning of each year; that is, they areannuities due.
$400 per year for 10 years at 12%.
$
$200 per year for 5 years at 6%.
$
$400 per year for 5 years at 0%.
$

Answer & Explanation Solved by verified expert

3.9 Ratings (467 Votes)

1a Information provided Annual payment 400 Time 10 years Interest rate 12 The future value is calculated by entering the below in a financial calculator PMT 400 N 10 IY 12 Press the CPT key and FV to compute the future value of the annuity The value obtained is 701949 Therefore the future value of the annuity is 701949 b Information provided Annual payment 200 Time 5 years Interest rate 6 The future value is calculated by entering the below in a financial calculator PMT 200 N 5 IY 6 Press the CPT key and FV to compute the future value of the annuity The value See Answer

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Problem 4-12Future Value of an AnnuityFind the future value of the following annuities. Thefirst payment in these annuities is made at the end ofYear 1, so they are ordinary annuities. Round your answersto the nearest cent. (Notes: If you are using a financialcalculator, you can enter the known values and then press theappropriate key to find the unknown variable. Then, withoutclearing the TVM register, you can "override" the variable thatchanges by simply entering a new value for it and then pressing thekey for the unknown variable to obtain the second answer. Thisprocedure can be used in many situations, to see how changes ininput variables affect the output variable. Also, note that you canleave values in the TVM register, switch to Begin Mode, press FV,and find the FV of the annuity due.)$400 per year for 10 years at 12%.$ $200 per year for 5 years at 6%.$ $400 per year for 5 years at 0%.$ Now rework parts a, b, and c assuming that payments are made atthe beginning of each year; that is, they areannuities due.$400 per year for 10 years at 12%.$ $200 per year for 5 years at 6%.$ $400 per year for 5 years at 0%.$