Find the amount to which $200 will grow under each of these conditions:
a) 5% compounded annually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.
b) 5% compounded semiannually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.
c) 5% compounded quarterly for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.
d) 5% compounded monthly for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.
e) 5% compounded daily for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.
f) Why does the observed pattern of FVs occur?
- The future values increase because as compounding periods per year increase, interest is earned on interest less frequently.
- The future values decrease because as compounding periods per year increase, interest is earned on interest more frequently.
- The future values increase because as compounding periods per year increase, interest is earned on interest more frequently.
- The future values increase because as compounding periods per year decrease, interest is earned on interest more frequently.
- The future values decrease because as compounding periods per year decrease, interest is earned on interest more frequently.