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Consider a dollar amount of $ 5 0 0 today, along with a nominal interest rate of 9 . 0 0 % . You are
Consider a dollar amount of $ today, along with a nominal interest rate of You are interested in calculating the future value of this amount after years. For all future value calculations, enter $with the negative sign for PV and for PMT When calculating the future value of $ compounded annually for years, you would enter a value of for a value of for Using the keystrokes you just identified on your financial calculator, the future value of $ compounded annually for at the given nominal interest rate, yields a future value of approximately When calculating the future value of $ compounded semiannually twice per year for years, you would enter a value of for a value of for IY Using the keystrokes you just identified on your financial calculator, the future value of $ compounded semiannually for at the given nominal interest rate, yields a future value of When calculating the future value of $ compounded quarterly for years, you would enter a value of for a value of for IY Using the keystrokes you just identified on your financial calculator, the future value of $ compounded quarterly for at the given nominal interest rate, yields a future value of When calculating the future value of $ compounded monthly for years, you would enter a value of for a value of for Using the keystrokes you just identified on your financial calculator, the future value of $ compounded monthly for at the given nominal interest rate, yields a future value of Hint: Assume that there are days in a year. When calculating the future value of $ compounded daily for years, you would enter a value of for a value of for Using the keystrokes you just identified on your financial calculator, the future value of $ compounded daily for at the given nominal interest rate, yields a future value of Based on the results of your calculations, you can conclude that all else equal more frequent compounding leads to a future value. This is due to a periodic interest for more frequent compounding.
Consider a dollar amount of $ today, along with a nominal interest rate of You are
interested in calculating the future value of this amount after years.
For all future value calculations, enter $with the negative sign for PV and for PMT
When calculating the future value of $ compounded annually for years, you would enter
a value of for a value of for
Using the keystrokes you just identified on your financial calculator, the future value of $
compounded annually for at the given nominal interest rate, yields a future value of
approximately
When calculating the future value of $ compounded semiannually twice per year for
years, you would enter a value of
for a value of
for IY
Using the keystrokes you just identified on your financial calculator, the future value of $
compounded semiannually for at the given nominal interest rate, yields a future value of
When calculating the future value of $ compounded quarterly for years, you would enter
a value of
for a value of
for IY
Using the keystrokes you just identified on your financial calculator, the future value of $
compounded quarterly for at the given nominal interest rate, yields a future value of
When calculating the future value of $ compounded monthly for years, you would enter
a value of
for a value of
for
Using the keystrokes you just identified on your financial calculator, the future value of $
compounded monthly for at the given nominal interest rate, yields a future value of
Hint: Assume that there are days in a year.
When calculating the future value of $ compounded daily for years, you would enter a
value of
for a value of
for
Using the keystrokes you just identified on your financial calculator, the future value of $
compounded daily for at the given nominal interest rate, yields a future value of
Based on the results of your calculations, you can conclude that all else equal more frequent
compounding leads to a
future value. This is due to a
periodic interest for
more frequent compounding.
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