Question 56225: Find the present value of $20,000 at 7% compounded monthly for 3 years.
a. $1,750.71
b. $16,221.58
c. $19,654.04
d. $24,658.51
How many compounding periods would there be in an investment compounded quarterly for 8 years?
a. 32
b. 64
c. 16
d. 8
Answer by rcmcc(152)   (Show Source):
You can put this solution on YOUR website! to find the value you can use the equation
A=P(1+i)^n
where P is the 20 000, i is the interest and n is the number of compounding terms.
since the interest is compounding monthly i= 0.07/12 months
and n will be equal to 3years x 12months =36
So A=20 000(1+0.05833)^36
A= 24658.51
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There are 4 quarters per year, if you compound quarterly for 8 years there will be 32 compounding periods. (8x4)
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