Exercise 6-1 For each of the following cases, indicate (a) to what rate columns,
ID: 2780921 • Letter: E
Question
Exercise 6-1 For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table Annual Rate Number of Years Invested Compounded (a) Rate of Interest (b) Number of Periods 10 11% 8% 10% Annually Quarterly Semiannually C. 19 2. In a present value of an annuity of 1 table: Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods 30 32 32 Open Show Work Annually Semiannually Quarterly 30 12% 12% 12% 16 Click if you would like to Show Work for this question:Explanation / Answer
1.future value of 1 table.
please have a look at the below mentioned formulas:
a) rate of interest is to be checked at = ( annual rate / number of compoundings per year)
b) number of periods is to be checked at = (number of years * number of compoudings per year)
the number of compounding per year in different cases is given below:
now, the required table, along with simultaneous workings for your better understanding (ignore worikings in your final answer)
2.In present value of annuity of 1 table:.
annual 1 time quarterly 4 times semi annual 2 times