Quiz 12: Annuities

To calculate future value (Amount) of an ordinary Annuity, use the following steps. 1. Calculate the interest rate per period for the annuity (nominal rate periods per year) 2. Determine the number of periods of the annuity (years periods per year) 3. From table 12-1, locate the ordinary annuity table factor at the intersection on the rate-per-period column and the number-of-period row. 4. Calculate the future value of the ordinary annuity. Future value ordinary annuity table factor Annuity payment (Ordinary annuity) Here, 1. The rate period is ( period year) 2. The number of period is ( years period per year) 3. From table 12-1, the table factor for periods is . 4. Future value ordinary annuity table factor annuity payment. Therefore, the required future value is .

Payment or receipt of equal amounts of money per period for a specified amount of time is known as an Annuity.

To calculate future value (Amount) of an ordinary Annuity, use the following steps. 1. Calculate the interest rate per period for the annuity (nominal rate periods per year) 2. Determine the number of periods of the annuity (years periods per year) 3. From table 12-1, locate the ordinary annuity table factor at the intersection on the rate-per-period column and the number-of-period row. 4. Calculate the future value of the ordinary annuity. Future value ordinary annuity table factor Annuity payment (Ordinary annuity) Here, 1. The rate period is ( period year) 2. The number of period is ( years period per year) 3. From table 12-1, the table factor for periods is . 4. Future value ordinary annuity table factor annuity payment. Therefore, the required future value is .

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