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October 24, 2014

October 24, 2014

Posted by **student** on Tuesday, June 19, 2007 at 11:46pm.

Investments Suppose $10,000 is invested at an annual rate of 5% for 10 years. Find the future value if interest is compounded as follows.

A) Annually

B) Quarterly

C) Monthly

D)Daily (365 days)

In each case, use the formula

Future value = Initial value)*(1 + i)^n

where i is the interest fraction paid for the interval (year, quarter, month or day) and n is the number of intervals.

In case A), i = 0.05 and n = 10

In case B), i = 0.0125 and n = 40

Do the numbers. That's how you learn this stuff.

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