please round to nearest cent. please do parts A-E. please do all parts within ea
ID: 1172195 • Letter: P
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please round to nearest cent. please do parts A-E. please do all parts within each part. Thanks!
Score: 0 of 4 pts 50112(2 complete) ? P5-6 (similar to) (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You just received a bonus of $2,000 a. Calculate the future value of $2,000, given that it will be held in the bank for 10 years and earn an annual interest rate of 4 percent b. Recalculate part (a) using a compounding period that is (1) semiannual and (2) bimonthly. c. Recalculate parts (a) and (b) using an annual interest rate of 8 percent. d. Recalculate part (a) using a time horizon of 20 years at an annual interest rate of 4 percent e. What conclusions can you draw when you compa a. What is the future value of $2,000 in a bank account for 10 years at an annual interest rate of 4 percent? S(Round to the nearest cent.) re the answers in parts (c) and (d) with the answers in parts (a) and (b)? Enter your answer in the answer box and then click Check Answer Type here to searchExplanation / Answer
a) Future value = 2000 (1 + 0.04)^10 = $ 2960.49 b) Future value = 2000 (1 + 0.04/2)^10*2 = $ 2971.89 Future value = 2000 (1 + 0.04/12)^10*12 = $ 2981.55 c) Future value = 2000 (1 + 0.08)^10 = $ 4317.85 Future value = 2000 (1 + 0.08/2)^10*2 = $4382.25 Future value = 2000 (1 + 0.08/12)^10*12 = $4439.25 d) Future value = 2000 (1 + 0.04)^20 = $4382.25 e) the bi-annual compounding at double interest rate is equal annual single interest rate for double period.
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