Question

On September 3, 2008 you invested $1,000 at the annual risk-free rate of 7% until APR. 18, 2009. Calculate the amount you will receive on APR 18, 2009 if the annual 5% rate is compounded;

annually

quarterly

monthly

daily

continuously.

Answer 1

	Amount Invested	1000
	Date of Investment	03-09-2008
	Date untill	18-04-2009
	Interest Rate	5%
	No of Days investment is held	228
	No of Days in a year	365
	T	0.625	=228/365
	Value of 'e'	2.71828
1)	Annual Compounding
	Maturity Amount	=$C$2*((1+$C$5)^$C$8)
		1031
2)	Quarerly Compounding
	Maturity Amount	=$C$2*((1+$C$5/4)^($C$8*4))
		1031.52602
3)	Monthly Compounding
	Maturity Amount	=$C$2*(1+$C$5/12)^($C$8*12)
		1031.658796
4)	Daily Compounding
	Maturity Amount	=$C$2*((1+$C$5/365)^($C$8*365))
		1031.723534
5)	Continuous comoiunding
	Maturity Amount	=$C$2*$C$9^($C$5*$C$8)
		1031.725719