Consider a dollar amount of $750 today, along with a nominal interest rate of 15.00%. You are interested in calculating the future value of this amount after 7 years. For all future value calculations, enter -$750 (with the negative sign) for PV and 0 for PMT. When calculating the future value of $750, compounded annually for 7 years, you would enter a value of _ for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded annually for 7 at the given nominal interest rate, yields a future value of approximately When calculating the future value of $750, compounded semi-annually (twice per year) for 7 years, you would enter a value of _ for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded semi-annually for 7 at the given nominal interest rate, yields a future value of When calculating the future value of $750, compounded quarterly for 7 years, you would enter a value of _ for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded quarterly for 7 at the given nominal interest rate, yields a future value of When calculating the future value of $750, compounded monthly for 7 years, you would enter a value of for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded monthly for 7 at the given nominal interest rate, yields a future value ofWhen calculating the future value of $750, compounded semi-annually (twice per year) for 7 years, you would enter a value of _ for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded semi-annually for 7 at the given nominal interest rate, yields a future value of When calculating the future value of $750, compounded quarterly for 7 years, you would enter a value of _ for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded quarterly for 7 at the given nominal interest rate, yields a future value of When calculating the future value of $750, compounded monthly for 7 years, you would enter a value of for N, a value of for I/ Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded monthly for 7 at the given nominal interest rate, yields a future value of Hint: Assume that there are 365 days in a year. When calculating the future value of $750, compounded daily for 7 years, you would enter a value of for N, a value of for I/Y. Using the keystrokes you just identified on your financial calculator, the future value of $750, compounded daily for 7 at the given nominal interest rate, yields a future value of future value. Based on the results of your calculations, you can conclude that (all else equal) more frequent compounding leads to a This is due to a periodic interest for more frequent compounding.Although annual compoundinginterest compounded once per yearis very common and an instructive way to introduce future value calculations, other compounding periods are possible. For example, semiannual compounding involves interest compounded twice per year. In such a scenario, you must consider the periodic interest rates and the number of compounding periods. For annual compounding, it is simple the periodic interest rate is the same as the stated nominal interest rate and the number of compounding periods is simply equal to the number of years. However, under semiannual compounding, the periodic interest rate is calculated as: l PeTiOdZC rate : Stated annual rate Number 0 f payments per year ' ' For semiannual compounding, this means you would divide the stated annual rate by two. i The number of periods is calculated as: \\ i A Number of periods : (Number of years) X (Periods per year) For semiannual compounding, this means you would multiply the number of years by two to get the total number of periods. Consider a deposit into a bank with a stated interest rate 6%, compounded quarterly, for 2 years. The periodic interest rate is V /o and the number of periods would be V _ Step 2: Learn: Future Value for Various Compounding Periods _, Understanding how compounding periods influence future values is important in the field of nance. 1 ' ' . _ r." .. . 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. Step 3: Practice: Future Value for Various Compounding Periods Now it's time for you to practice what you've learned. Consider a dollar amount of $750 today, along with a nominal interest rate of 12.00%. You are interested in, calculating the future value of this amount after 8 years. For all future value calculations, enter -$750 (with the negative sign) for PV and 0 for PMT. The future value of $750, compounded annually for 8 at the given nominal interest rate, is approximately Using your financial calculator, the future value of $750, compounded semi-annually for 8 at the given nominal interest rate, is approximately Using your financial calculator, the future value of $750, compounded quarterly for 8 at the given nominal interest rate, is approximately Using your financial calculator, the future value of $750, compounded monthly for 8 at the given nominal interest rate, is approximately Hint: Assume that there are 365 days in a year. Using your financial calculator, the future value of $750, compounded daily for 8 at the given nominal interest rate, is approximately