Alternative single amount a 28500 at end of 3 years b

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Unformatted text preview: 0,000 5 B 4–17 3,000 20 3,500 10,000 10 D LG3 600 C 1,000 15,000 40 Future value of an annuity For each of the cases shown in the following table, calculate the future value of the annuity at the end of the deposit period, assuming that the annuity cash flows occur at the end of each year. Case Amount of annuity Interest rate A $ 2,500 B 500 12 6 C 30,000 20 5 D 11,500 9 8 E 6,000 14 30 8% Deposit period (years) 10 176 PART 2 Important Financial Concepts LG3 4–18 Present value of an annuity For each of the cases shown in the table below, calculate the present value of the annuity, assuming that the annuity cash flows occur at the end of each year. Case Amount of annuity Interest rate A $ 12,000 B 55,000 12 15 7% Period (years) 3 C 700 20 9 D 140,000 5 7 E 22,500 10 5 LG3 Future value of a retirement annuity Hal Thomas, a 25-year-old college graduate, wishes to retire at age 65. To supplement other sources of retirement income, he can deposit $2,000 each year into a tax-deferred ind...
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This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

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