Question

Future value of an ordinary annuity. Fill in the missing future values in the following table for an ordinary annuity:

Number of Payments or Years		Annual Interest Rate		Present Value		Annuity		Future Value
6		7%		0		$270.26

(Click on the following icon in order to copy its contents into a spreadsheet.)

Number of Payments or Years		Annual Interest Rate		Present Value		Annuity		Future Value
6		7%		0		$270.26		?
17		15%		0		$1,261.39		?
27		3.5%		0		$732.59		?
320		0.8%		0		$503.85		?

Answer 1

1.Information provided:

Present value= $270.26

Interest rate= 7%

Time= 6 years

Enter the below in a financial calculator to compute the future value:

PV= -270.26

I/Y= 7

N= 6

Press the CPT key and FV to calculate the future value.

The value obtained is 405.59.

Therefore, the future value is $405.59.

2.Information provided:

Present value= $1,261.39

Interest rate= 15%

Time= 17 years

Enter the below in a financial calculator to compute the future value:

PV= -1,261.39

I/Y= 17

N= 15

Press the CPT key and FV to calculate the future value.

The value obtained is 13,574.15.

Therefore, the future value is $13,574.15.

3.Information provided:

Present value= $732.59

Interest rate= 3.5%

Time= 27 years

Enter the below in a financial calculator to compute the future value:

PV= -732.59

I/Y= 27

N= 3.5

Press the CPT key and FV to calculate the future value.

The value obtained is 1,854.60.

Therefore, the future value is $1,854.60.

4.Information provided:

Present value= $503.85

Interest rate= 0.8%

Time= 320 years

Enter the below in a financial calculator to compute the future value:

PV= -503.85

I/Y= 320

N= 0.8

Press the CPT key and FV to calculate the future value.

The value obtained is 6,451.66.

Therefore, the future value is $6,451.66.