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# Future value for various compounding periods

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?

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?

#### Solution Preview

FUTURE VALUE FOR VARIOUS COMPOUNDING PERIODS
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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?

FV = PV (1+R)N where PV is the ...

#### Solution Summary

This solution is comprised of a detailed calculation to find the future value for various compounding periods.

\$2.19