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calculate the present value AND the compound interest for this investment, round to the nearest cent...$20.000 with a nominal rate of 14% for 30 months ( semiannually)

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  1. P = Po(1+r)^n

    r = (14%/2)/100% = 0.07 = Semi-annual %
    rate expressed as a decimal.

    n = 2comp./yr. * 2.5yrs. = 5 Compounding
    periods.

    P = Po(1+0.07)^5 = $20,000
    Po = 20000/1.07^5 = $14,259.72

    I=P-Po = 20,000 - 14,259.72 = $5,740.28

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