Question

Complete the annuity due for the following. (Do not round intermediate calculations. Round your answer to the nearest cent.)

Amount of payment		Payment payable	Years	Interest rate	Annuity Due
$33,000		Quarterly	8	8%	$

Answer 1

If the amount of $ 33,000 is Present Value ,

Annuity due

=

Present Value /Present value of annuity due

=

$       33,000

/

23.9377

=

$   1,378.58

Working:

Present value of annuity due

=

((1-(1+i)^-n)/i)*(1+i)

Where,

=

((1-(1+0.02)^-32)/0.02)*(1+0.02)

i

8%*3/12

=

0.02

=

23.937702

n

8*12/3

=

32

If the amount of $ 33,000 is Future Value ,

Annuity due

=

Future Value / Future Value of annuity due of 1

=

$       33,000

/

45.11157

=

$       731.52

Working:

Future Value of annuity due of 1

=

((((1+i)^n)-1)/i)*(1+i)

Where,

=

((((1+0.02)^32)-1)/0.02)*(1+0.02)

i

8%*3/12

=

0.02

=

45.11157

n

8*12/3

=

32