Answer:
The correct answer for option (a) is $10,124, option (b) is $10,135 and option (c) is $10,141.
Explanation:
According to the scenario, the given data are as follows:
Initial amount (p) = $9,000
Annual interest rate (r1)= 4%
Semi annual interest rate (r2) = 4% / 2 = 2%
Quarterly interest rate (r3) = 4% / 4 = 1%
Time period ( annual) (n1)= 3 years = 3
Time period ( semi-annual) (n2) = 3 × 2 = 6
Time period ( quarterly) (n3) = 3 × 4 = 12
So, we can calculate future value by using following formula:
A= P ( 1 +r)^n
(a). Putting the value in the formula
A= P ( 1 +r1 )^n1
= $9,000 ( 1 + 4%)^3
= $9,000 x (1.04)^3
= $10,124
(b). Putting the value in the formula
A= P ( 1 +r2 )^n2
= $9,000 ( 1 + 2%)^6
= $9,000 x (1.02)^6
= $10,135
(c.) Putting the value in the formula
A= P ( 1 +r3 )^n3
= $9,000 ( 1 + 1%)^12
= $9,000 x (1.01)^12
= $10,141
