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16 June, 07:27

Calculate the future value in six years of $5,000 received today if your investments pay (Do not round intermediate calculations. Round your answers to 2 decimal places. (e. g., 32.16))

Future Value

a. 5 percent compounded annually $

b. 7 percent compounded annually

c. 9 percent compounded annually

d. 9 percent compounded semiannually

e. 9 percent compounded quarterly

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Answers (1)
  1. 16 June, 07:36
    0
    Instructions are listed below.

    Explanation:

    Giving the following information:

    The future value in six years of $5,000 received today:

    A) i=0.05 annually

    FV = PV * (1+i) ^n

    FV = 5,000 * (1.05) ^6 = $6,700.48

    B) i=0.07 annually

    FV = 5,000 * (1.07) ^6 = $7,503.65

    C) i=0.09 annually

    FV = 5,000 * (1.09) ^6 = $8,385.50

    D) i = 0.09 semiannually = 0.045

    FV = 5,000 * (1.045) ^12 = $8,479.41

    E) i=0.09 quaterly = 0.0225

    n = 6*4 = 24

    FV = 5,000 * (1.0225) ^24 = $8,528.83
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