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If 23200 dollars is invested at an interest rate of 8 percent per year, find the value of the investment at theend of 5 years for the following compounding methods, to the nearest cent.(a) Annual: $(b) Semiannual: $(c) Monthly: $(d) Daily: $Question Help: Video Message instructorSubmit Questionneed help

If 23200 dollars is invested at an interest rate of 8 percent per year find the value of the investment at theend of 5 years for the following compounding metho class=

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Solution

Given

Principal = $23200

rate = 8% = 0.08

t = 5 years

Using the formula

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]

(a) Annual

n = 1

[tex]A=23200(1+\frac{0.08}{1})^{1\cdot5}=\$34088.41[/tex]

(b) Semi Annual

n = 2

[tex]A=23,200(1+\frac{0.08}{2})^{2\cdot5}=\$34341.67[/tex]

(c)

n = 12

[tex]A=23200(1+\frac{0.08}{12})^{12\cdot5}=\$34564.42[/tex]

(d)

For Daily

n = 365

[tex]A=23200(1+\frac{0.08}{365})^{365\cdot5}=\$34608.82[/tex]

In Summary,

(a) Annual: $34088.41

(b) Semiannual: $34341.67

(c) Monthly: $34564.42

(d) Daily: $34608.82

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