Use a financial calculator or computer software program to answer the following questions.
a. What would be the future value (FV) of $19,378 invested now if the money remains deposited for eight years, the annual interest rate is 18 percent, and interest on the investment is compounded semiannually?
b. How would your answer for (a) change if quarterly compounding were used?
Using a financial calculator, enter 19378 and press PV, enter 4.50 (18/4) and press %i, and enter 32 (8 × 4) and press N. Then, press CPT and FV which gives an answer of 79255.65 or $79,255.65.

  • CreatedMarch 27, 2015
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