Determine the future value

1. What will be the maturity value of $30,000 deposited in a three-year certificate of deposit that earns 8 percent interest compounded semiannually?

2. Determine the future value of the following annuities; assume each annuity can earn 10 percent interest.

A. Six annual payments of $15,000 beginning one year from today.

B. 12 semiannual payments of $7,500 beginning six months from today.

C. 24 quarterly payments of $3,750 beginning three months from today.

D. Explain why the results differ.

Determine the present value of the following annuities if the annuity earns 8 percent.

A. Five annual payments of $10,000 beginning one year from today.

B. 20 quarterly payments of $2,500 beginning three months from today.

C. 10 semiannual payments of $5,000 beginning six months from today.

D. Explain why the results differ.

Solution:

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