Exam2 - .. I think it is 7 periods and not 8 periods since...

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Q:Use the following 8% interest factors Present Value of Future Value of Ordinary Annuity Ordinary Annuity 7 periods 5.2064 8.92280 8 periods 5.7466 10.63663 9 periods 6.2469 12.48756 What will be the balance on September 1, 2013 in a fund which is accumulated by making $8,000 annual deposits each September 1 beginning in 2006, with the last deposit being made on September 1, 2013? The fund pays interest at 8% compounded annually. ANS: This appears to be a trick question to me.
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Unformatted text preview: .. I think it is 7 periods and not 8 periods since it is asking for the balance on Sep. 1 2013. I approached this problem by finding Future Value of Annuity Due and using it to find the accumulated value. FV-AD = FVF-OA x (1+i) = 8.9228 x (1.08) Accum. Value = FV-AD x R = 9.6336 x 8000 =77093 So I add an additional 8000 to Accum Value b/c there is one more deposit in Sep. 1, 2013. and the final answer is $85093....
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This note was uploaded on 06/03/2010 for the course ACC 51 taught by Professor Botsford during the Spring '08 term at DeAnza College.

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