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Future Value of Annuities: Ordinary Annuity and Annuity Due

Find the future value of the following annuities. The first payment in these annuities is made at the end of year one. That is, they are are ordinary annuities.

A) $400 per years for 10 years at 10%
B) $200 per year for 5 years at 5%
C) $400 per year for 5 years at 5%
D) Now rework parts a and b and c assuming that payments are made at the beginning of each year; that is they are annuities due

Solution Preview

Find the future value of the following annuities. The first payment in these annuities is made at the end of year one. that is, they are are ordinary annuities.

A) $400 per years for 10 years at 10%

FVA = W x (1 + i)n - 1 where FVA is the future value
i W is the amount required to deposit ...

Solution Summary

This solution is comprised of a detailed explanation to a multiple choice question about calculating the future value of the following annuities.

$2.19