This problem demonstrates the dependence of an annuity's future value on the compounding frequency. Suppose $1000 is invested at the end of each year for 25 years. Calculate the future value if the invested funds earn:
a. 6% compounded annually.
b. 6% compounded semiannually.
c. 6% compounded quarterly.
d. 6% compounded monthly.

Question

Quizplus · Accepted Answer

The Answer of This problem demonstrates the dependence of an annuity's future value on the compounding frequency. Suppose $1000 is invested at the end of each year for 25 years. Calculate the future value if the invested funds earn:
a. 6% compounded annually.
b. 6% compounded semiannually.
c. 6% compounded quarterly.
d. 6% compounded monthly.

This Problem Demonstrates the Dependence of an Annuity's Future Value