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Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.

$400 per year for 16 years at 8%.
$200 per year for 8 years at 4%.
$1,000 per year for 2 years at 0%.
Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent. $
400 per year for 16 years at 8%.
$200 per year for 8 years at 4%.
$1,000 per year for 2 years at 0%.

1 Answer

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Final answer:

The future values for ordinary and annuity due can be found using the formula FV = P(1+r)^n. For $400 per year for 16 years at 8%, the future value is $1,087.75 for ordinary and $1,173.21 for annuity due. For $200 per year for 8 years at 4%, the future value is $1,676.80 for ordinary and $1,741.63 for annuity due. For $1,000 per year for 2 years at 0%, the future value is $2,000.00 for both ordinary and annuity due.

Step-by-step explanation:

To find the future values of these ordinary annuities, we can use the formula:

FV = P(1+r)^n

Where FV is the future value, P is the annual payment, r is the interest rate, and n is the number of years.

For $400 per year for 16 years at 8%:

FV = 400(1+0.08)^16

FV = $1,087.75

For $200 per year for 8 years at 4%:

FV = 200(1+0.04)^8

FV = $1,676.80

For $1,000 per year for 2 years at 0%:

FV = 1000(1+0)^2

FV = $2,000.00

For $400 per year for 16 years at 8% (annuity due):

FV = 400(1+0.08)^16

FV = $1,087.75(1+0.08)

FV = $1,173.21

For $200 per year for 8 years at 4% (annuity due):

FV = 200(1+0.04)^8

FV = $1,676.80(1+0.04)

FV = $1,741.63

For $1,000 per year for 2 years at 0% (annuity due):

FV = 1000(1+0)^2

FV = $2,000.00(1+0)

FV = $2,000.00

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