Respuesta :
Answer:
Given:
Amount = $5000
Tenure = 5 years.
Future value = [tex]Present value\times (1+r)^{n}[/tex]
where
n is number of periods
r is rate per period.
(a) 6% compounded annually.
Interest is compounded annually
No of periods in 5 years = 5
Future value = 5000[tex](1+0.06)^{5}[/tex] = 5000 × 1.33823 = $6691.15
(b) 8% compounded annually
Interest is compounded annually
No of periods in 5 years = 5
Future value =5000[tex](1+0.08)^{5}[/tex] = 5000×1.46933 = 7346.65
(c) 10% compounded annually
Interest is compounded annually
No of periods in 5 years = 5
Future value = 5000[tex](1+0.10)^{5}[/tex] = 5000×1.61051 = $8052.55
(d) 10% compounded semiannually
Interest is compounded semiannually
No of periods in 5 years is 5*2 = 10
Rate per period = 10÷2 = 5%
Future value =5000[tex](1+0.05)^{10}[/tex] = 5000×1.62889 = $8144.45
(e) 10% compounded quarterly
Interest is compounded annually
∴No of periods in 5 years = 5×4 = 20
Rate per period = 10÷4 = 2.5
Future value = 5000[tex](1+0.025)^{20}[/tex] = 5000×1.63862 = $8193.10
