Question

Number of Periods of an Annuity

You have $43,061.65 in a brokerage account, and you plan to deposit an additional $4,500 at the end of every future year until your account totals $225,000. You expect to earn 6.7% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places.

years

Present Value of an Annuity

Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.)

$600 per year for 10 years at 6%.
$

$300 per year for 5 years at 3%.
$

$600 per year for 5 years at 0%.
$

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

$600 per year for 10 years at 6%.
$

$300 per year for 5 years at 3%.
$

$600 per year for 5 years at 0%.
$