excel online activity: future value of an annuity\nthere are three cases: (a) $3,000 annually, 9 years, 4%…

excel online activity: future value of an annuity\nthere are three cases: (a) $3,000 annually, 9 years, 4%; (b) $1,000 annually, 17 years, 11%; (c) $7,000 annually, 30 years, 10%.\nthe data has been collected in the microsoft excel online file below. open the spreadsheet and perform the required analysis to answer the question below. do not round intermediate calculations. round your answers to the nearest cent.\nopen spreadsheet\ncalculate the future value of a lump sum for each case\nfuture value\ncase a: $\ncase b: $\ncase c: $

excel online activity: future value of an annuity\nthere are three cases: (a) $3,000 annually, 9 years, 4%; (b) $1,000 annually, 17 years, 11%; (c) $7,000 annually, 30 years, 10%.\nthe data has been collected in the microsoft excel online file below. open the spreadsheet and perform the required analysis to answer the question below. do not round intermediate calculations. round your answers to the nearest cent.\nopen spreadsheet\ncalculate the future value of a lump sum for each case\nfuture value\ncase a: $\ncase b: $\ncase c: $

Answer

Explanation:

Step1: Recall future - value formula for an ordinary annuity

The formula for the future value of an ordinary annuity is $FVA = A\times\frac{(1 + r)^{n}-1}{r}$, where $A$ is the annual payment, $r$ is the interest rate per period, and $n$ is the number of periods.

Step2: Calculate for Case a

Given $A=$3000$, $r = 0.04$, and $n = 9$. $FVA_a=3000\times\frac{(1 + 0.04)^{9}-1}{0.04}$ First, calculate $(1 + 0.04)^{9}=1.04^{9}\approx1.42331181$. Then $(1.04^{9}-1)\approx0.42331181$. $\frac{(1.04^{9}-1)}{0.04}\approx10.5827953$. So $FVA_a=3000\times10.5827953=$31748.39$.

Step3: Calculate for Case b

Given $A = $1000$, $r=0.11$, and $n = 17$. $FVA_b=1000\times\frac{(1 + 0.11)^{17}-1}{0.11}$ $(1 + 0.11)^{17}=1.11^{17}\approx5.05447026$. $(1.11^{17}-1)\approx4.05447026$. $\frac{(1.11^{17}-1)}{0.11}\approx36.8588206$. So $FVA_b=1000\times36.8588206=$36858.82$.

Step4: Calculate for Case c

Given $A=$7000$, $r = 0.10$, and $n = 30$. $FVA_c=7000\times\frac{(1 + 0.10)^{30}-1}{0.10}$ $(1 + 0.10)^{30}=1.1^{30}\approx17.4494023$. $(1.1^{30}-1)\approx16.4494023$. $\frac{(1.1^{30}-1)}{0.10}\approx164.494023$. So $FVA_c=7000\times164.494023=$1151458.16$.

Answer:

Case a: $$31748.39$ Case b: $$36858.82$ Case c: $$1151458.16$