# Question: Find the present values of the following ordinary annuities a

Find the present values of the following ordinary annuities:

a. PV of $400 each six months for five years at a simple rate of 12 percent, compounded semiannually

b. PV of $200 each three months for five years at a simple rate of 12 percent, compounded quarterly

c. The annuities described in parts (a) and (b) have the same amount of money paid into them during the five-year period and both earn interest at the same simple rate, yet the present value of the annuity in part (b) is $31.46 greater than the one in part (a). Why does this occur?

a. PV of $400 each six months for five years at a simple rate of 12 percent, compounded semiannually

b. PV of $200 each three months for five years at a simple rate of 12 percent, compounded quarterly

c. The annuities described in parts (a) and (b) have the same amount of money paid into them during the five-year period and both earn interest at the same simple rate, yet the present value of the annuity in part (b) is $31.46 greater than the one in part (a). Why does this occur?

## Answer to relevant Questions

To complete your last year in business school and then go through law school, you will need $30,000 per year for four years, starting next year (that is, you will need to withdraw the first $30,000 one year from today). Your ...Find the interest rates, or rates of return, on each of the following:a. You borrow $700 and promise to pay back $749 at the end of one year.b. You lend $700 and receive a promise to be paid $749 at the end of one year.c. ...Sue Sharpe, manager of Oaks Mall Jewelry, wants to sell on credit, giving customers three months in which to pay. However, Sue will have to borrow from her bank to carry the accounts payable. The bank will charge a simple 15 ...Assume that you are nearing graduation and that you have applied for a job with a local bank. As part of the bank’s evaluation (interview) process, you have been asked to take an exam that covers several financial analysis ...Buner Corp.’s outstanding bond has the following characteristics:Years to maturity .......... 6.0Coupon rate of interest ......... 8.0%Face value .............. $1,000If investors require a rate of return ...Post your question