Future value of an annuity
Find the future values of the following ordinary annuities:
FV of $800 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Round your answer to the nearest cent.
$
FV of $400 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Round your answer to the nearest cent.
$
These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in Part b ends up larger than the one in Part a. Why does this occur?