SOLUTION: can someone please explain this problem to me thanks: Investments Suppose $10,000 is invested at an annual rate of 5% for 10 years. Find the future value if interest is compoun

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Question 85608: can someone please explain this problem to me thanks:
Investments Suppose $10,000 is invested at an annual rate
of 5% for 10 years. Find the future value if interest is compounded
as follows.
a. Annually
b. Quarterly
c. Monthly
d. Daily (365 days)
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
Investments Suppose $10,000 is invested at an annual rate
of 5% for 10 years. Find the future value if interest is compounded
as follows.
:
Learn the compound interest formula:
A = P%281%2B%28r%2Fn%29%29%5Ent
Where: A = Final value; P=amt invested; r = interest rate in decimals; n = number of times compounded per year; t = time in years
:
In this problem; P = 10000; r = .05; t = 10 yr
:
a. Annually: n = 1
A = 10000%281%2B%28.05%2F1%29%29%5E%2810%2A1%29
A = 10000*%281.05%29%5E10
A = 10000 * 1.62889; find (1.05)^10 with good calc
:
A = 16,288.94 value in 10 yrs compounded annually
:
:
b. Quarterly n = 4
A = 10000%281%2B%28.05%2F4%29%29%5E%2810%2A4%29
A = 10000%281%2B.0125%29%5E40
A = 10000*%281.0125%29%5E40
A = 10000 * 1.64362;
:
A = 16436.19 value in 10 yrs compounded quarterly
:
:
See if you can do the last two, using the first two as examples
c. Monthly; n = 12
d. Daily (365 days) n = 365