Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if $5,000 is deposited initially at 12% annual interest for 5 years, and (2) determine the effective annual rate (EAR). Annual Compounding (1) The future value, FV,, is $ 8811.71. (Round to the nearest cent.) (2) If the 12% annual nominal rate is compounded annually, the EAR is 12.00 %. (Round to two decimal places.) Semiannual Compounding (1) The future value, FV, is $(Round to the nearest cent.)