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The future value of a single deposit of $1,000 will be greater when this amount is...

The future value of a single deposit of $1,000 will be greater when this amount is compounded annually, semi-annually, quarterly, or monthly? Why?

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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins as Cut 11.A. A.--- 9- ずWrap Text ー E ゴText General copy ▼ チFormat Painter B l U. ーータ.Δ. -=- 還便困Merge & Center. $,%,,Ma conditional Format Cell Insert Delete Format Conditional Fomat yell Inserta Formatぶutos mh A 2 ClearFe Select Edting Clipboard Alignment Number er Cells TJ2 TH TN TO TP TO TR TS 110 TW WHEN AMOUNT IS COMPOUNDED ANNUALLY, INTEREST IS PAID ONLY ONCE SAY RATE AMOUNT- AFTER A YEAR, YOU WILL GET- 1000(1+10%)- 4 10% 1000 6 1100 8 NOW IF AMOUNT IS COMPOUNDED SEMI-ANNUALLY, INTEREST WILL BE PAID 2 TIMES, AT THE END OF 6 MONTHS AND AT THE END OF 12 MONTHS SAY RATE AMOUNT 10 1.1 12 13 14 15 16 17 143 19 20 /4 | CALCULATOR , 1096 INTEREST FOR 6 MONTHS 1000*(1+1096/2)- NOW INTEREST FOR NEXT 6 MONTHS WILL BE PAID ON 1050 THAT IS 1000+50 WHICH WE RECEIVED OF INTEREST SO OBVIOUSLY AS INTEREST IS ALSO PAYABLE ON INTEREST, THE FUTURE VALUE WILL BE HIGHER THAN ANNUAL COMPOUNDING INTEREST FOR NEXT 6 MONTHS = SO TOTAL AMOUNT RECEIVED = 1102.5, WHICH IS 2.5 MORE THAN ANNUAL COMPOUNDING 1050 1050*(1+1096/2) = 1102.5 SO HIGHER THE COMPOUNDING HIGHER WILL BE THE AMOUNT So MONTHLY COMPOUNDING WILL GIVE HIGHEST FUTURE VALUE TOR LOAN OPTIONS pv, fv, annuity CAP STRU VALUE profit margin symbols LOCK BOX DILUTION DOLLAR COST AVG MORTGAGE XPO Sheeti Sheet2 S OPTIONS rences: x261 福 130%

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