Why does the observed pattern of FVs occur

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Reference no: EM131854703

Find the amount to which $200 will grow under each of these conditions:

a) 5% compounded annually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

b) 5% compounded semiannually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

c) 5% compounded quarterly for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

d) 5% compounded monthly for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

e) 5% compounded daily for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent.

f) Why does the observed pattern of FVs occur?

- The future values increase because as compounding periods per year increase, interest is earned on interest less frequently.

- The future values decrease because as compounding periods per year increase, interest is earned on interest more frequently.

- The future values increase because as compounding periods per year increase, interest is earned on interest more frequently.

- The future values increase because as compounding periods per year decrease, interest is earned on interest more frequently.

- The future values decrease because as compounding periods per year decrease, interest is earned on interest more frequently.

Reference no: EM131854703

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