Compound Interest
1. Find the principal \(P\) that will generate the future value,
\(A= $12,000\) at 8% compounded annually for \(10\) years?
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2. Find the principal \(P\) that will generate the future value,
\(A= $8,000\) at 10% compounded monthly for \(10\) years?
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3. How much should a father invest at the time his daughter is
born in order to provide her with \($40,000\) at age \( 18 \)? Assume
that the interest is 5% compounded quarterly.
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4. Which of the two rates would yield the larger amount in 1 year:
8% compounded semiannually or 7.8% compounded daily? (Hint:
Start with a principal of \($1,000\) in each instance.)
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