Future value of an annuity Using the values below, answer the questions that follow. (Click on...

 

Transcribed Image Text:

Future value of an annuity Using the values below, answer the questions that follow. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Amount of annuity $6,500 Interest rate Deposit period (years) 9% 9 a. Calculate the future value of the annuity, assuming that it is (1) An ordinary annuity. (2) An annuity due. b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity-ordinary or annuity due-is preferable as an investment? Cxplain why. a. (1) The future value of the ordinary annuity is $. (Round to the nearest cent.) Future value of an annuity Using the values below, answer the questions that follow. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Amount of annuity $6,500 Interest rate Deposit period (years) 9% 9 a. Calculate the future value of the annuity, assuming that it is (1) An ordinary annuity. (2) An annuity due. b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity-ordinary or annuity due-is preferable as an investment? Cxplain why. a. (1) The future value of the ordinary annuity is $. (Round to the nearest cent.)

Answer rating: 100% (QA)

a 1 The future value of the ordinary annuity is FV 6500 x 1 0099 FV 1... View the full answer