Question

d. Calculate the future sum of

​$1 comma 5001,500​,

given that it will be held in the bank for

1515

years and earn

1111

percent compounded semiannually.

e. What is an annuity​ due? How does this differ from an ordinary​ annuity?

f. What is the present value of an ordinary annuity of

​$2 comma 4002,400

per year for

1212

years discounted back to the present at

1515

​percent? What would be the present value if it were an annuity​ due?

g. What is the future value of an ordinary annuity of

​$2 comma 4002,400

per year for

1212

years compounded at

1515

​percent? What would be the future value if it were an annuity​ due?

h. You have just borrowed

​$160 comma 000160,000​,

and you agree to pay it back over the next

2525

years in

2525

equal​ end-of-year payments plus

1515

percent compound interest on the unpaid balance. What will be the size of these​ payments?

i. What is the present value of a perpetuity of

​$1 comma 5001,500

per year discounted back to the present at

1818

​percent?

j. What is the present value of an annuity of

​$1 comma 2001,200

per year for 10​ years, with the first payment occurring at the end of year 10​ (that is, ten

​$1 comma 2001,200

payments occurring at the end of year 10 through year​ 19), given a discount rate of

1313

​percent?

k. Given a discount rate of

1111

​percent, what is the present value of a perpetuity of

​$1 comma 9001,900

per year if the first payment does not begin until the end of year​ 10?

Answer 1

As per rules I am answering the first 4 subparts of the question

d	Future value	$7,475.93
e	Annuity due is amount received at the beginning of a period. Ordinary annuity is the amount received at the end of a period.
f	Present value of ordinary annuity	$13,009.49
	PV of annuity due	$14,960.91
g	FV of ordrinary annuity	$69,604.00
	FV of annuity due	$80,044.60

WORKINGS