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What is the future value of 22 periodic payments of $4,720 each made at the begi

ID: 2444884 • Letter: W

Question

What is the future value of 22 periodic payments of $4,720 each made at the beginning of each period and compounded at 8%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Use future value of ordinary annuity of 1 table

What is the present value of $3,640 to be received at the beginning of each of 30 periods, discounted at 10% compound interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Use present value of ordinary annuity of 1 table

What is the future value of 15 deposits of $3,570 each made at the beginning of each period and compounded at 10%? (Future value as of the end of the 15th period.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Use future value of ordinary annuity of 1 table

What is the present value of 8 receipts of $3,450 each received at the beginning of each period, discounted at 9% compounded interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Use present value of ordinary annuity of 1 table

Explanation / Answer

Future Value of 22 periodic payments of 4720 @ 8% = 4720 * FVIFA(22 , 8%) * 1.08 = 4720 * 55.4568 * 1.08 = 282696.58368

We are using the ordinary annuity table which gives us the compounding details for payments received at the end of the year. SInce the payment accrues at the beginning of the year, there is an additional time period for which compounding is to be done hence we multiply by 1.08

Present Value of 30 periodic payments of 3640 @ 10% = 3640 * PVIFA(30 , 10%) * 1.1 = 3640 * 9.4269 * 1.1 = 37745.3076

Future Value of 15 periodic payments of 3570 @ 10% = 3570 * FVIFA(15 , 10%) * 1.10 = 3570* 31.7725 * 1.1 = 124770.61

Present Value of 8 periodic payments of 3450 @ 9% = 3450 * PVIFA(8 , 9%) * 1.09 = 3450 * 5.5348 * 1.09 = 20813.61

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