Questiuon: Changing compounding frequency Using annual, semiannual, and quarterly compounding periods,
(1) calculate the future value if $4,000 is deposited initially at 8% annual interest for 8 years, and
(2) determine the effective annual rate (EAR).
Annual Compounding(1) To find the future value for a single deposit (present value) made today, the initial deposit is compounded at the annual interest rate for the number of years.