If 24200 dollars is invested at an interest rate of 8 percen

If 24200 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at the end of 5 years for the following compounding methods. Annual: Your answer is $ Semiannual: Your answer is $ Monthly: Your answer is $ Daily: Your answer is $ Continuously: (remember to use the formula A(t) = A_0e^rt for continuously compounding) Your answer is $

Solution

$24200 invested at 8% per year for 5 years
a) annual : A = P(1 + r/100)^n

= 24200(1 +0.08)^5 = $ 35557.74

b) semi annual : A = P(1 +r/200)^10

= 24200(1.04)^10 = $ 35821.912

c) monthly : A = P(1 +r/1200)^60

= 24200( 1+ 8/1200)^60 = $36054.27

d) daily : A = 24200( 1+ 8/36500)^365*5 = $ 36100.58

e) continously : A = Pe^(0.08t)

= 24200e^(0.08*5)

= $ 36102.16