Effect of Compounding Period

Floyd Enterprises deposited $4,700 in the bank on January 1, 2017, earning 8% interest. Floyd Enterprises withdraws the deposit plus accumulated interest on January 1, 2019.

Use the appropriate present or future value table:

FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1

Compute the amount of money Floyd withdraws from the bank assuming that interest is compounded (a) annually, (b) semiannually, and (c) quarterly. Round your answers to the nearest dollar.

a. Annual compounding	$
b. Semiannual compounding	$
c. Quarterly compounding