Investigating Compound Interest

1. An investment of $2000 is made for ten years at 8.3% per annum. a) Determine the amount of the investment if the interest is compounded with the following frequency: i) Annually ii) Semi-annually iii) Quarterly iv) Monthly b) Based on above, describe how compounding frequency affects the amount of an investment. 2. An investment of $2000 earns interest that is compounded annually for ten years. a) Determine the amount of the investment at the following annual rates of interest: i) 8.0% ii) 8.5% iii) 9.0% iv) 10.0% b) Based on the calculations above, describe how the interest rate affects the amount of an investment. 3. An investment of $2000 is made at 8.3% per annum, compounded annually. a) Determine the amount of the investment if it is invested for the following time periods: i) 8 years ii) 10 years iii) 12 years iv) 14 years 3A b) Based on the calculations above, describe how the overall length of the investment affects the amount. 4. The compounding frequency, the interest rate, and the duration of an investment all have an effect upon the amount of the investment. Rank these three factors in the order of greatest effect to least effect