Question

Determine the amount of money in a savings account at the end of 1 year, given an initial deposit of $12,000 and a 4 percent annual interest rate when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Answer 1

$ 12480

$ 12,484,80

$12,487.25

Step-by-step explanation:

annually

quarterly

semi annually

The formula for calculating future value:

FV = P (1 + r) nm

FV = Future value

P = Present value

R = interest rate

m = number of compounding

N = number of years

annually - 12,000 x 1,04 = 12480

semi annual - 12,000 x (1.02)^2 = 12,484,80

quarterly - 12,000x (1.01)^4 = 12,487.25