Annuity with non- annual payments
(1) The basic annuity valuation equation can handle situations in which there is compounding more frequently than once a year. In a one paragraph posting, describe how you would translate the key variables of a 8% APR annuity with $1,000 annual payments at the end of each year for 4 years to convert it for semiannual compounding in the annuity formula
Be sure to show your final formula input variables after adjustment for semiannual compounding
(2)Would the future value on an annuity increase or decrease with increasing compounding as you go from semiannual to quarterly to monthly? Explain Why?
