Ch $05-$ End$-$of$-$Chapter Problems $-$ Time Value of Money

Problem $5\mathrm{.}23($Future Value for Various Compounding Periods$)$

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Problem Walk$-$Through

Find the amount to which $$700$ will grow under each of these conditions:

a$.8\%$ compounded annually for $7$ years. Do not round intermediate calculations. Round your answer to the nearest cent.

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b$.8\%$ compounded semiannually for $7$ years. Do not round intermediate calculations. Round your answer to the nearest cent.

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c$.8\%$ compounded quarterly for $7$ years. Do not round intermediate calculations. Round your answer to the nearest cent.

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d$.8\%$ compounded monthly for $7$ years. Do not round intermediate calculations. Round your answer to the nearest cent.

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e$.8\%$ compounded daily for $7$ years. Assume $365-$days in a year. Do not round intermediate calculations. Round your answer to the nearest cent.

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f$.$ Why does the observed pattern of FVs occur?

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