Question

Julie Miller has $1,000 to invest for 2 Years at an annual interest rate of 12%. Find FV annually, semiannually, quarterly, monthly and daily

Answer 1

Assumption: As nothing is mentioned in question about simple interest or compound interest, The question is solved assuming simple interest.

Future Value = Investment (1 + r X t)

where r = rate of Interest

and t = time period

Annually

Future Value = 1000 ( 1 + 12% x 1)

Future Value = 1000 x 1.12

Future Value = 1120

Semi annually

Future Value = 1000 ( 1 + 12% x 6/12)

Future Value = 1000 x 1.06

Future Value = 1060

Quarterly

Future Value = 1000 ( 1 + 12% x 3/12)

Future Value = 1000 x 1.03

Future Value = 1030

Monthly

Future Value = 1000 ( 1 + 12% x 1/12)

Future Value = 1000 x 1.01

Future Value = 1010

Daily

Future Value = 1000 ( 1 + 12% x 1/365)

Future Value = 1000 x 1.000329

Future Value = 1000.329

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