(BQ) Part 2 ebook "Practical business math procedures" has contents: Annuities and sinking funds, the cost of home ownership; how to read, analyze, and interpret financial reports; inventory and overhead; business statistics; life, fire, and auto insurance,.and other contents. | sLa37677_ch13_316-340 7/26/07 11:19 AM Page 316 Chapter 13 Annuities and Sinking Funds LEARNING UNIT OBJECTIVES Note: A complete set of plastic overlays showing the concept of annuities is found at the end of the chapter (p. 336A). LU 13–1: Annuities: Ordinary Annuity and Annuity Due (Find Future Value) • Differentiate between contingent annuities and annuities certain (p. 318). • Calculate the future value of an ordinary annuity and an annuity due manually and by table lookup (pp. 319–323). LU 13–2: Present Value of an Ordinary Annuity (Find Present Value) • Calculate the present value of an ordinary annuity by table lookup and manually check the calculation (pp. 323–325). • Compare the calculation of the present value of one lump sum versus the present value of an ordinary annuity (p. 325). Wall Street Jo urnal © 2005 LU 13–3: Sinking Funds (Find Periodic Payments) • Calculate the payment made at the end of each period by table lookup (pp. 326–327). • Check table lookup by using ordinary annuity table (p. 327 ). Wall Street Jo urnal © 2005 sLa37677_ch13_316-340 7/26/07 11:20 AM Page 317 317 $1 ,2 87 Learning Unit 13–1 INVESTING YOUR SAVINGS Assuming the price of coffee remains the same, we added up what you would save if you gave up coffee over 30 years and what you would save if you made coffee at home instead of buying it. We then invested the savings. We compounded each amount weekly at annual rates: 0 percent, which means you did nothing with the money; at 6 percent, which is an average expected rate of return on a stock portfolio, and at 10 percent, an aggressive expected rate of return. $1, 209 $ In 30 years. 0% annual returns $ $ $ 6% annual returns $ $ $108,000 $ $ 10% annual returns $ $ $ $36,270 $101,600 $230,000 $ $ $ $38,610 $ $ $245,000 Boston Sunday Globe © 2004 Lisa Poole/AP Wide World A Boston Globe article entitled “Cost of Living: A Cup a Day” .
