1. Find the amount to which $600 will grow under each of these conditions:

1. 16% compounded annually for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

2. 16% compounded semiannually for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

3. 16% compounded quarterly for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

4. 16% compounded monthly for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

5. 16% compounded daily for 3 years. Assume 365-days in a year. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

6. Why does the observed pattern of FVs occur? -Select-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.Item 6

2

Find the present value of $600 due in the future under each of these conditions:

1. 12% nominal rate, semiannual compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

2. 12% nominal rate, quarterly compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

3. 12% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

4. Why do the differences in the PVs occur? -Select-The present values decline as periods per year increase.The present values decline as periods per year decrease.The present values increase as periods per year increase.The present values are not affected by changes in the number of periods per year.The present values are positively related to the number of discounting periods per year.Item 4