Question

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.	6 percent compounded annually	$
b.	8 percent compounded annually
c.	10 percent compounded annually
d.	10 percent compounded semiannually
e.	10 percent compounded quarterly

PLEASE SHOW THE WORK

Answer 1

future value of single amount formula = present value *(1+interest rate)^number of periods

	future value	working
a.6 percent compounded annually	$7,092.60	5,000*(1.06)^6 =>7,092.60
b.8 percent compounded annually	$7,934.37	5,000*(1.08)^6=>7,934.37
c.10 percent compounded annually	$8.857.81	5,000*(1.10)^6=>8,857.81
d.10 percent compounded semiannually	$8,979.28	5,000*(1.05)^12=>8,979.28
e.10 percent compounded quarterly	$9,043.63	5,000*(1.025)^24=>9,043.63

note: for semi annual compounding the relevant interest rate will be = 10% * 6/12 =>5%

relevant number of periods = 6 years * 2 times =>12

for quarterly compounding , the relevant interest rate = 10%*3/12 =>2.5%

number of periods = 6 years * 4times =>24 times.