# Question: For the following questions assume an annual annuity of 1 000

For the following questions, assume an annual annuity of $1,000 and a required return of 12%.

a. What is the future value of a ten-year ordinary annuity?

b. If you earned an additional year’s worth of interest on this annuity, what would be the future value?

c. What is the future value of a 10-year annuity due?

d. What is the relationship between your answers in parts (b) and (c)? Explain.

a. What is the future value of a ten-year ordinary annuity?

b. If you earned an additional year’s worth of interest on this annuity, what would be the future value?

c. What is the future value of a 10-year annuity due?

d. What is the relationship between your answers in parts (b) and (c)? Explain.

**View Solution:**## Answer to relevant Questions

Kim Edwards and Hiroshi Suzuki are both newly minted 30-year-old MBAs. Kim plans to invest $1,000 per month into her 401(k) beginning next month. Hiroshi intends to invest $2,000 per month, but he does not plan to begin ...Melissa Gould wants to invest today in order to assure adequate funds for her son’s college education. She estimates that her son will need $20,000 in 18 years; $25,000 in 19 years; $30,000 in 20 years; and $40,000 in 21 ...Jill Chu wants to choose the best of four immediate retirement annuities available to her. In each case, in exchange for paying a single premium today, she will receive equal annual end-of-year cash benefits for a specified ...Find the present value of a 3-year, $20,000 ordinary annuity deposited into an account that pays 12% annual interest, compounded monthly. Solve for the present value of the annuity in the following ways: a. As three single ...1. What is the monthly payment? 2. How much of the first payment is interest? 3. How much of the first payment is principal? 4. How much will Casino.com Corporation owe on this loan after making monthly payments for three ...Post your question