Question

Find the amount to which $775 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

a. 6% compounded annually for 5 years. $

b. 6% compounded semiannually for 5 years. $

c. 6% compounded quarterly for 5 years. $

d.6% compounded monthly for 5 years.

Answer 1

Future Value = Present Value * (1+Rate of Interest)^Time

a. Future Value = $ 775*(1+6%)^5

= $ 1,037.12

Answer = $ 1,037.12

b. Future Value = $ 775*(1+6%/2)^(5*2)

= $ 1,041.54

Answer = $ 1,041.54

c. Future Value = $ 775*(1+6%/4)^(5*4)

= $ 1,043.81

Answer = $ 1,043.81

d. Future Value = $ 775*(1+6%/12)^(5*12)

= $ 1,045.36

Answer = $1,045.36