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Thread: Finding the future value F of the following ordinary annuities.

  1. #1

    Question Finding the future value F of the following ordinary annuities.

    1. Monthly paymentsof P3,000 for 4 years with interest rate of 3%
    compounded monthly
    F = 152,793.70
    2. Quarterly paymentof P5,000 for 10 years with interest rate of 2%
    compounded quarterly
    F = 2,239,232.20
    3. Semi-annualpayments of P12, 500 with interest rate of 10.5%
    compoundedsemi-annually for 6 years
    F = 201,867.60
    4. Annual paymentsof P105,000 with interest rate of 12% compounded
    annually for 5 years
    F = 667,048.10
    5. Daily payments ofP20 for 30 days with interest rate of 20%
    compounded daily for1 month
    F = ?

    Hello! I just want to ask if my answer from 1 to 4 is correct, I'm having a trouble on the last one, any help will be greatly appreciated.

  2. #2
    Elite Member
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    Apr 2005
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    You seem to be having trouble with all of them. Please show your work.

    If your work is pushing buttons on a calculator, that's fine. Tell us what calculator and what buttons.

    It's difficult to direct you when you show only the final result.
    "Unique Answers Don't Care How You Find Them." - Many may have said it, but I hear it most from me.

  3. #3
    Quote Originally Posted by tkhunny View Post
    You seem to be having trouble with all of them. Please show your work.

    If your work is pushing buttons on a calculator, that's fine. Tell us what calculator and what buttons.

    It's difficult to direct you when you show only the final result.
    So, all of it is wrong?

  4. #4
    Elite Member
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    Quote Originally Posted by IEvolve View Post
    5. Daily payments of P20 for 30 days with interest rate
    of 20% compounded daily for 1 month
    F = ?
    "for 1 month" not required...

    a = 20
    n = 30
    i = .20/365

    First 4 are correct.
    I'm just an imagination of your figment !

  5. #5
    Elite Member
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    Opinions vary because you have not specified the payment timing. It is not typical for accumulations to pay at the END of each period. Mr. Dennis has validated your odd assumption. Try paying at the beginning of each period and see if you get a different answer.
    "Unique Answers Don't Care How You Find Them." - Many may have said it, but I hear it most from me.

  6. #6
    Elite Member
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    Quote Originally Posted by tkhunny View Post
    Mr. Dennis...
    TK, that should be Mr. Denis, Esq

    IEvolve, you can check your answers through
    a simple looper program showing each calculation.
    As example, 1000 annually, 10% annually, 4 years:
    Code:
    YEAR   DEPOSIT   INTEREST    BALANCE
      1    1000.00        .00    1000.00
      2    1000.00     100.00    2100.00
      3    1000.00     210.00    3310.00
      4    1000.00     331.00    4641.00
    By formula:
    d = 1000
    r = .10
    n = 4
    f = d[(1 + r)^n - 1] / r = 4641.00
    HOKAY?
    I'm just an imagination of your figment !

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