A) 100 dollars is placed in the account which pays 12%. How much will be in account after 1 year if interest is compounded annually, semiannually, or monthly?
Compounded annually: 100 x (1+0.12) =$112
Compounded semiannually: 100 x (1+0.12/2)^2 =$112.36
Compounded monthly: 100 x (1+0.12/12)^12 =$112.68
B) 100 dollars is to be received after 1 year. Determine present value of the amount if you can earn 12% compounded annually, semiannually, or monthly?