Effect of Compounding Period

Kern Company deposited $1,000 in the bank on January 1, 2016, earning 8% interest. Kern Company withdraws the deposit plus accumulated interest on January 1, 2018.

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 Kern 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	$