A) 100 dollars is placed in an account that pays 12 percent. How much will be in

Question

A) 100 dollars is placed in an account that pays 12 percent. How much will be in the account after one year if interest is compounded annually, semiannually, or monthly?

Compounded annually: 100 x (1+0.12) =$112

Compounded semiannually: 100 x (1+0.12/2)^2 =$112.36

Compounded monthly: 100 x (1+0.12/12)^12 =$112.68

B) 100 dollars is to be received after one year. What is the present value of this amount if you can earn 12 percent compounded annually, semiannually, or monthly?

(Thisis the question ?I need help with, I have the first part already)

Explanation / Answer

let persent value be p

1.then p x (1+.12)=100

p=100/1.12=89.286

2. p x( 1 +.12/2)^2=100

p x1.06^2 =100

p=88.999

3.p x (1+.12/6)^12=100

p=78.85

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.