Find the accumulated value of an investment of $10,000 for 4 years at an interest rate of 5% if the money is

Question

Find the accumulated value of an investment of $10,000 for 4 years at an interest rate of 5% if the money is? A. Compounded semiannually; b. Compounded quarterly; c. Compounded monthly d. Compounded continuously

Answer 1

a) 8 periods at a rate of 5%/2 = 10,000((1+.05/2))⁸

b 16 periods at a rate of 5%/4 = 10,000((1+.05/4))¹⁶

c) 48 periods at a rate of 5%/12 = 10,000((1+.05/12))⁴⁸

d 4 years compounded continuously at 5% 10,000*e.^{05*4 =} 10,000e^0.2

I'll leave you to do the calculations.

If you have any problems dealing with cash flows please reach out to me I have been doing it for a living for more years than I care to admit.

Best,

Lenny D.