EXERCISE 6-4
(a)
Future value of an ordinary
annuity of $5,000 a period
for 20 periods at 8%
$228,809.80
($5,000 X 45.76196)
Factor (1 + .08)
X
1.08
Future value of an annuity
due of $5,000 a period at 8%
$247,114.58
(b)
Present value of an ordinary
annuity of $2,500 for 30
periods at 10%
$23,567.28
($2,500 X 9.42691)
Factor (1 + .10)
X
1.10
Present value of annuity
due of $2,500 for 30 periods
at 10%
$25,924.00
(Or see Table 6-5 which
gives $25,924.03)
(c)
Future value of an ordinary
annuity of $2,000 a period
for 15 periods at 10%
$63,544.96
($2,000 X 31.77248)
Factor (1 + 10)
X
1.10
Future value of an annuity
due of $2,000 a period
for 15 periods at 10%
$69,899.46
(d)
Present value of an ordinary
annuity of $3,000 for 6
periods at 9%
$13,457.76
($3,000 X 4.48592)
Factor (1 + .09)
X
1.09
Present value of an annuity
due of $3,000 for 6 periods
at 9%
$14,668.96
(Or see Table 6-5)
EXERCISE 6-5
(a)
$50,000 X 4.96764 = $248,382.
(b)
$50,000 X 8.31256 = $415,628.
(c)
($50,000 X 3.03735 X .50663) = $76,940.63.
or (5.65022 – 4.11141) X $50,000 = $76,940.50 (difference of $.13 due to
rounding).