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(a) Annual: $ (b) Semiannual: $ (c) Monthly: $ (d) Daily: $

(a) Annual: $ (b) Semiannual: $ (c) Monthly: $ (d) Daily: $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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If 43300 dollars is invested at an interest rate of 9 percent per year, find the value of the investment at the end of 5 years for the following compounding methods, to the nearest cent. (a) Annual: $ (b) Semiannual: $ (c) Monthly: $ (d) Daily: $
Transcribed Image Text:If 43300 dollars is invested at an interest rate of 9 percent per year, find the value of the investment at the end of 5 years for the following compounding methods, to the nearest cent. (a) Annual: $ (b) Semiannual: $ (c) Monthly: $ (d) Daily: $
Expert Solution
Step 1

(A) Annual Compounding = P (1+r)n

(B) Semi Annual Compounding = P (1 +r2)2n

(C) Monthly Compunding = P (1+r12)12n

(d) Daily Compunding = P (1 + r365)365n

 

Where

  • P = Principal amount invested
  • r= interest rate per annum (in%)
  • n= Number of years
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