Find the compound value of a $125, ten-year ordinary annuity at 6 percent annual interest if the payment at the end of year 6 is omitted. Please include all formulas and calculations used to find solution. 125 125 125 125 125 0 125 125 125 125 . . . . . . . . . . . t0 t0 t6 t10 Solution Answer Figures in $ Year Annuity Future value factor -6% Compounded value A B A*B 0 0 0 0 0 1 125 (1.06)9 1.6895 211.18 2 125 (1.06)8 1.5938 199.23 3 125 (1.06)7 1.5036 187.95 4 125 (1.06)6 1.4185 177.31 5 125 (1.06)5 1.3382 167.28 6 0 (1.06)4 1.2625 0.00 7 125 (1.06)3 1.1910 148.88 8 125 (1.06)2 1.1236 140.45 9 125 1.06 1.0600 132.50 10 125 1 1.0000 125.00 Total compounded value of annuity 1489.79 Answer : Total compounded value of annuity is $ 1489.79 Figures in $ Year Annuity Future value factor -6% Compounded value A B A*B 0 0 0 0 0 1 125 (1.06)9 1.6895 211.18 2 125 (1.06)8 1.5938 199.23 3 125 (1.06)7 1.5036 187.95 4 125 (1.06)6 1.4185 177.31 5 125 (1.06)5 1.3382 167.28 6 0 (1.06)4 1.2625 0.00 7 125 (1.06)3 1.1910 148.88 8 125 (1.06)2 1.1236 140.45 9 125 1.06 1.0600 132.50 10 125 1 1.0000 125.00 Total compounded value of annuity 1489.79.