FUTURE VALUE OF AN ANNUITY Find the future values of the following ordinary annuities:
A. FV of $800 paid each 6 months for 5 years at a nominal rate of 7% compounded semiannually. Round your answer to the nearest cent. (PLEASE show all work)
B. FV of $400 paid each 3 months for 5 years at a nominal rate of 7% compounded quarterly. Round your answer to the nearest cent. (PLEASE show all work)
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?