Question

At the beginning of each year, Al rose invested $1,200 semiannually at 12 percent for 8 years. The cash value of the annuity due at the end of the eighth year is?

Answer 1

careful, the payments are made at the beginning of each period, where the formulas we use assume that payments are made at the end of the period

i = .12/2 = .06
n = 8(2) = 16 but we will use only 15
and I will assume that the first payment is $1200 is made NOW.

PV = 1200 + 1200(1 - 1.06^-15)/.06
= .....

Answer 2

31654.70