Question

Find the accumulated value of a $5000 investment which is invested for 8 years at an
interest rate of 12% compounded:
(a) annually
(b) semi-annually
(c) quarterly
(d) monthly
(e) continuou

Answer 1

r = .12/n where n = times per year
a = 5000 * (1+r)^8n
eg
annual:
5000 * 1.12^8
semi where n = 2
5000 * 1.06^16
quarterly where n = 4
5000 *1.03^32
etc

continuous
a = 5000 e^.12 t = 5000 e^.96
= 13058.48