Question

# a. What is the future value in five years of \$1,200 invested in an account with...

a. What is the future value in five years of \$1,200 invested in an account with an annual percentage rate of 10 percent, compounded annually? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value \$  Not attempted

b. What is the future value in five years of \$1,200 invested in an account with an annual percentage rate of 10 percent, compounded semiannually? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value \$  Not attempted

c. What is the future value in five years of \$1,200 invested in an account with an annual percentage rate of 10 percent, compounded monthly? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value \$  Not attempted

d. What is the future value in five years of \$1,200 invested in an account with an annual percentage rate of 10 percent, compounded continuously? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value \$  Not attempted

a.We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=\$1200*(1.1)^5

=\$1200*1.61051

=\$1932.61(Approx).

2.We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=1200(1+0.1/2)^(2*5)

=\$1200*1.628894627

=\$1954.67(Approx).

c.We use the formula:
A=P(1+r/1200)^12n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=\$1200(1+0.1/12)^(12*5)

=\$1200*1.645308935

=\$1974.37(Approx).

d.We use the formula:
A=P(e)^rn
where
A=future value
P=present value
r=rate of interest
n=time period.

e=2.71828

A=\$1200(2.71828)^(0.1*5)

=\$1200*1.648720716

=\$1978.46(Approx).

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