Illustrate non-annual compounding

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The following questions illustrate non-annual compounding.

a) One hundred 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?

b) One hundred 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?

Reference no: EM131176663

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