MUST SHOW ALL WORK (3 pictures)

7. (a) Will the future value be larger or smaller if we compound an initial amount more often than annually-for example, every 6 months, or semiannually - holding the stated interest rate constant? Explain your answer. (2 points) (b-1) What is the future value of $200 after three years under 12% semiannual compounding? (1 point) (b-2) What is the effective annual rate for 12% interest with semiannual compounding? Be sure to show your EAR answer to 2 decimals, that is xx.xx% (1 point) Hint: Go to practice problem 26 and review the problem and solution. Also note in Moodle: "Video, how to work Practice Problems #26 & 27). This provides a "click by click" solution for EAR problems using the BAll plus with the equation. There are multiple ways to calculate EAR, whichever method you use, you need to show your inputs. If using equation: EAR = (1 + APR/m) m, identify APR and m If using the financial calculator's "ICONV function, identify NOM, and C/Y If using Excel's "effect" function, identify your inputs and how the equation would look in Excel. (C-1) What is the future value of $200 after three years under 12% quarterly compounding? (1 point) (c-2) What is the effective annual rate (EAR) for 12% interest with quarterly compounding? (1 point) (d-1) What is the future value of $200 after three years under 12% daily compounding? Assume 365 day years and do not do any interim rounding. Just enter the interest rate, divide by 365, hit "-", then hit your I/Y key (or similar for other calculators). (1 point) (d-2) What is the effective annual rate for 12% interest with daily compounding? (1 point)