Question

Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

(A) 9% compounded annually for 5 years.
(B) 9% compounded semiannually for 5 years.
(C) 9% compounded quarterly for 5 years.
(D) 9% compounded monthly for 5 years.

Answer 1

(A)Fv= $864.2

(B) Fv= $1302.05

(C) Fv= $2003.4

(D) Fv= $96817.21

Step-by-step explanation:

Giving the following information:

Initial investment= $550

We will use the final value formula:

FV=Present value*(1+i)^n

(A) 9% compounded annually for 5 years.

Fv= 550*(1.09)^5=$864.2

(B) 9% compounded semiannually for 5 years.

Fv= 550*(1.09)^10= $1302.05

(C) 9% compounded quarterly for 5 years.

Fv= 550*(1.09)^15= $2003.4

(D) 9% compounded monthly for 5 years.

Fv= 550*(1.09)^60=$96817.21