Can someone please help me solve these problems or help me find an easy formula?..No matter how many times I read or try calculating I can't get it please help me..I would really appreciate it thank you..
Calculate the future value of the following:
$5,000 compounded annually at 6% for 5 years
$5,000 compounded semiannually at 6% for 5 years
$5,000 compounded quarterly at 6% for 5 years
$5,000 compounded annually at 6% for 6 years
I will do this one:
"$5,000 compounded quarterly at 6% for 5 years"
Amount = 5000(1.015)^20
= ....
notice the value of i is .06/4 (compounded quarterly)
and n = 5*4 = 20, the number of quarter years.
Do the others the same way
Thank you Reiny
How did you get 1.015?
A small computer software company invests $5000 at 10% compounded semiannually for 2 years. What will the compound amount be at the end of this period?
101500
how much would 1000 in an account paying 14 percent interest compounded semi annually accumulate to in 10 years
To calculate the future value of an investment, you can use the compound interest formula:
\[FV = P(1 + r/n)^(nt)\]
Where:
FV = Future Value
P = Principal (starting amount)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years
For the first problem, you have $5,000 compounded annually at 6% for 5 years. Let's calculate the future value:
\[FV = 5000(1 + 0.06/1)^(1 * 5)\]
In this case, the interest is compounded annually (n = 1), so we divide the annual interest rate (6%) by 1. We then substitute the values into the formula and solve:
\[FV = 5000(1 + 0.06)^5\]
Simplifying the equation:
\[FV = 5000(1.06)^5\]
Calculating the exponent:
\[FV = 5000 * 1.3382255776\]
\[FV = 6691.13\]
The future value of $5,000 compounded annually at 6% for 5 years is $6,691.13.
Similarly, you can use the same formula to calculate the future value for the other problems:
1. $5,000 compounded semiannually at 6% for 5 years:
\[FV = 5000(1 + 0.06/2)^(2 * 5)\]
2. $5,000 compounded quarterly at 6% for 5 years:
\[FV = 5000(1 + 0.06/4)^(4 * 5)\]
3. $5,000 compounded annually at 6% for 6 years:
\[FV = 5000(1 + 0.06/1)^(1 * 6)\]
By substituting the respective values and performing the calculations, you can find the future values of these investments.