If 35800 dollars is invested at an interest rate of 10 percent per year, find the value of the investment at the end of 5 years for the following compounding methods, to the nearest cent.

Question

If 35800 dollars is invested at an interest rate of 10 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: $  

Answer 1

(a) FV = 35800(1 + 0.10)⁵ = $57656.26.64;

(b) FV = 35800(1 + 0.10/2)¹⁰ = $58314.43;

(c) FV = 35800(1 + 0.10/12)⁶⁰ = $58902.06;

(d) FV = 35800(1 + 0.10/365)¹⁸²⁵ = $59020.18