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Daniel Twumasi has found an investment institution that will pay him 8% annual interest, compounded quarterly. If he leaves the money in the account for 24 months (2 years), he will be paid 2% interest compounded over eight periods. Future value from investing $100 at 8% Interest Compounded Quarterly over 24 Months (2 Years).
a. Using the details above separately estimate the semiannual compounding interest and quarterly compounding.
b. Find the future value at the end of years 1 and 2 from Investing $100 at 8% Interest, given various compounding periods stated in statement above.
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Answers: 2
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