Question

(Compound interest with nonannual periods?) a. Calculate the future sum of ?$5 comma 0005,000?, given that it will be held in the bank for 1010 years at an APR of 66 percent. b. Recalculate part ?(a?) using compounding periods that are? (1) semiannual and? (2) bimonthly? (every two? months). c. Recalculate parts ?(a?) and ?(b?) for an APR of 1212 percent. d. Recalculate part ?(a?) using a time horizon of 2020 years? (the APR is still 66 ?percent). e. With respect to the effect of changes in the stated interest rate and holding periods on future sums in parts ?(c?) and ?(d?), what conclusions do you draw when you compare these figures with the answers found in parts ?(a?) and ?(b?)?

Answer 1

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