Future value for various compounding periods


Problem: Future value for various compounding periods. Find the amount to which $500 will grow under each of these conditions:

a.12% compounded annually for 5 years

b.12% compounded semiannually for 5 yrs

c:12 % compounded quarterly for 5 years

d: 12 %compounded monthly for 5 yrs

e. 12% compounded daily for 5 yrs

f. Why does the observed pattern of FVs occur?

Problem: Present value for carious compounding periods. Find the present value of %500 due in the future under each conditions:

a. 12% nominal rate, semiannual compounding, discounted back 5 yrs

b. 12% nominal rate, quarterly compounding, discounted back 5 yrs

c. 12% nominal rate, monthly compounding, discounted back 1 yr

d. Why do the differences in the PVs occur?

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Finance Basics: Future value for various compounding periods
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