Question
9 a) What is the future value of $17,500 (deposited today, no other deposits made) after twenty-five years under 3.90% annual rate, with semi-annual compounding?
9 a) What is the future value of $17,500 (deposited today, no other deposits made) after twenty-five years under 3.90% annual rate, with semi-annual compounding?
b) What is the effective annual rate (EAR) for 3.9% annual interest, with interest compounded on a semiannual basis? Be sure to show your EAR answer to 2 decimals, that is xx.xx%
c) What is the future value of $17,500 (as above) after twenty-five years under 3.90% annual rate, with quarterly compounding?
d) What is the effective annual rate (EAR) for 3.90% annual interest rate with quarterly compounding?
e) Explain how the effective annual rate changes based on the number of compounding periods per year.
f) What is the future value of $17,500 (as above) after twenty-five years under 3.90% annual interest, with daily compounding? Assume a 365-day year and do not do any interim rounding.
g) What is the effective annual rate for 3.90% (APR) annual interest with daily compounding?
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