Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. annuity payments are assumed to come at the end of

Annuity payments are assumed to come at the end of each payment period (termed an...

60.1K

Verified Solution

Question

Finance

Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due).

What is the future value of a 18-year annuity of $2,000 per period where payments come at the beginning of each period? The interest rate is 5 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value. For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to Appendix C for n = 6 and i = 10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 ($100 6.716). (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

You generate a transgenic mouse that produces 10% of the normal levels of choline acetyltransferase (ChAT)...

Medical Sciences
Q

In most resting cells, the concentration of sodium ions is higher outside of cells compared with...

Medical Sciences
Q

A parallel-plate air capacitor of area A=12.0cm2 and plate separation d=3.80mm is charged by a battery...

Physics
Q

1. Therapist addressing issues of substance abuse within the Native American Community should consider interventions that emphasize...

Psychology
Q

V. State whether you agree or disagree with the following statements and briefly explain why. Please...

Economics
Q

Monthly sales of a particular personal computer are expected to decline at the following rate...

Basic Math
Q

The accompanying table describes the distribution of eye colors reported by male and female statistics...

Statistics
Q

Please explain the steps. A 30-year-old buys, for $8,000 (in year...

Accounting
Q

On 1 October 2007 William Ltd purchased a machine for $60,000 + GST. Installation cost...

Accounting
Q

11 At December 31, Folgeys Coffee Company reports the following results for its calendar...

Accounting
Q

In a sell or process further decision, which of the following costs are relevant? I....

Accounting
Q

Required: Prepare a master budget for the three-month period ending June 30 . Include the...

Accounting