What is the future value of an investment of $3,000 after three years with compounding at the

Question:

What is the future value of an investment of $3,000 after three years with compounding at the following rates and frequencies? What is the effective annual interest rate in each case?

a. 8.75 percent compounded monthly.

b. 8.625 percent compounded daily.

c. 8.5 percent compounded continuously.

Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...