Question

FOR EACH OF THE CASES SHOWN IN THE TABLE BELOW, CALCULATE THE FUTURE VALUE OF THE SINGLE CASH FLOW DEPOSITED TODAY THAT WILL BE AVAILABLE AT THE END OF THE DEPOSIT PERIOD IF THE INTEREST IS COMPOUNDED ANNUALLY, SEMI ANNUALLY AND QUARTERLY AT THE RATE SPECIFIED OVER THE GIVEN PERIOD.

CASE	CASH FLOW	INTEREST RATE	DEPOSIT PERIOD (YEARS)	ORDINARY ANNUITY	ANNUITY DUE
A	$750	8%	10
B	$3,250	12%	8
C	$9,500	16%	20
D	$10,000	20%	4

Answer 1

CASE	CASH FLOW	INTEREST RATE	DEPOSIT PERIOD (YEARS)
				quarterly OA	semiannual OA	Annual OA		quarterly AD	semiannual AD	Annual AD
A	750	8%	10	$        1,656.03	$       1,643.34	$           1,619.19		$       1,656.03	$       1,643.34	$       1,619.19
B	3,250	12%	8	$        8,369.02	$       8,256.14	$           8,046.88		$       8,369.02	$       8,256.14	$       8,046.88
C	9,500	16%	20	$ 2,18,973.09	$ 2,06,382.95	$     1,84,877.21		$ 2,18,973.09	$ 2,06,382.95	$ 1,84,877.21
D	10,000	20%	4	$      21,828.75	$    21,435.89	$        20,736.00		$     21,828.75	$     21,435.89	$     20,736.00

Now since there are no cash flows in interim, there will not be any difference in FV calculated due to annuity due or ordinary annuity