What is the future value of an ordinary annuity if 2000 is deposited at the end of each year for 3 years at 6 percent?

What is the future value on an ordinary annuity of 12000 dollars per year for three years at 9 percent interest compounded annually?

39,337.20

The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity True or false?

true

What is the difference between ordinary annuity and annuity due?

In an ordinary annuity, the payments are fed into the investment at the END of the year. In an annuity due, the payments are made at the BEGINNING of the year. Therefore, with an annuity due, each annuity payment accumulates an extra year of interest. This means that the future value of an annuity due is always greater than the future value of an ordinary annuity.When computing present value, each payment in an annuity due is discounted for one less year (because one of the payments is not made in the future- it is made at the beginning of this year and is already in terms of present dollars). This will result in a larger present value for an annuity due than for an ordinary annuity, as well.

What is the future value of a 5year ordinary annuity with annual payments of 200 evaluated at 15 percent?

Fv = $200(fvifa15%,5) = $200(6.7424) = $1,348.48.

Differentiate between ordinary annuity and annuity due?

In an ordinary annuity, the annuity payments are fed into the investment at the END of the year. In an annuity due, the payments are made at the BEGINNING of the year. Therefore, with an annuity due, each annuity payment accumulates an extra year of interest. This means that the future value of an annuity due is always greater than the future value of an ordinary annuity.When computing present value, each payment in an annuity due is discounted for one less year (because one of the payments is not made in the future- it is made at the beginning of this year and is already in terms of present dollars). This will result in a larger present value for an annuity due than for an ordinary annuity, as well.

When there is only one compounding period in a ordinary annuity the table factor for future value is always 1?

True

What is the formula for future value of ordinary annuity?

FVoa = PMT [((1 + i)n - 1) / i]FVoa = Future Value of an Ordinary AnnuityPMT = Amount of each paymenti = Interest Rate Per Periodn = Number of Periods

Determine the future value of an annuity into which quarterly deposits of 450 are made for 9 years if the annuity pays 10 percent compounded quarterly?

138645

What is the Difference between the future value of annuity and sinking fund?

future value of an annuity is a reciprocal of a sinking fund

What happens to the present value of an annuity if the future value of an annuity is increased?

It increases

How do you calculate annuity payments?

An annuity is a series of equal cash flows over time that comes at regular intervals. The cash flows must be either all payments or all receipts, consistently occur either at the beginning or the end of the interval and represent one discount period. Payments made at the beginning of the period indicate an "annuity due" which can include rents and insurance payments. Payments at the end of the period indicate an "ordinary annuity" which include mortgage payments, bond payments, etc.Although loan payments, mortgages and similar financial instruments can be regarded as an annuity, the term is mostly applied from the perspective of being an asset. For example, payments from a lottery or distributions from a lump-sum amount can be considered as an annuity. Annuities can also be an investment used to guarantee a regular income during a retirement.Calculating annuity payments can come from two perspectives: the future value of an annuity or the present value of an annuity.Calculating Ordinary Annuity Payments From Future ValueIf the desired ending amount is known together with the discount rate and number of periods, the payments can be calculated as follows:PMT = FV / (((1 + r)^n - 1) / r)Where:PMT = Payment amount made at the end of the periodFV = The future value of the annuity (how much the balance will be after all payments have been made)r = the discount rate^ = raises the value to the left to an exponential number on the rightn = the number of paymentsIn this calculation, the present value (PV) is assumed to be zero.Calculating Ordinary Annuity Payments From Present ValueIf the sum of money or balance on hand is known together with the discount rate and the number of periods, the amount of payments to reduce the balance to zero can be calculated as follows:PMT = PV / ((1-[1 / (1 + r)^n] )/ r)Where:PMT = Payment amount made at the end of the periodPV = The present value of the annuity (how much is currently on hand)r = the discount rate^ = raises the value to the left to an exponential number on the rightn = the number of paymentsIn this calculation, the future value (FV) is assumed to be zero.Calculating Annuity Due Payments From Future ValueBecause the payment earns interest for one additional period than the ordinary annuity, the future value should be adjusted as follows:FV annuity due = FV ordinary annuity X (1+r)The new value for future value can now be inserted in the original equation to compute the annuity due payments.Calculating Annuity Due Payments From Present ValueTo remove the additional discount period for each payment made on an annuity due, the present value of the annuity must be adjusted as follows:PV annuity due = PV ordinary annuity X (1+r)The new value for future value can now be inserted in the original equation to compute the annuity due payments.Alternate MethodsBecause calculating the payments for ordinary annuities and annuities due, a financial calculator such as the HP 10bII can be used to simplify the process. When many calculations must be performed, the process can be expedited through the use of a spreadsheet such as Microsoft Excel which is equipped with time value of money functions.See the related links below for an annuity calculator for different types of contracts that compute the balance, distributions, or present value using the amounts you specify.

How do you define the value of value?

I need a answer how do you know when to use future value or present value and future value of a annuity and present value of annuity Please help

What is the future value of an ordinary annuity if 2000 is deposited at the end of each year for 3 years at 6 percent?

Add your answer:

What is the present value of 3 year annuity of 100 if discount rate is 6%?

Exactly what values are calculated by a annuity value calculator?

Where can you buy an annuity value calculator?

What is the future value of 4000 for 5 years at 4 percent compounded bimonthly?

What is the future value of 1000 invested at 8 percent for 7 years?