Step 1: Given ValueInitial Investment = c = $155,000Compound = yearlyInterest rate=i = 21%Time = n = 7 yearsStep 2: calculationFuture Value = c*(1+r)^n= 155,000*(1 + 0.21)^7= 155,000 * 3.79749833583= 588,612.242054= $588,612.24SolutionThus, the amount of the investment after 7 years would be $588,612.24 SOLVE STEP BY STEP IN DIGITAL FORMAT2. Calculate the amount of the previous problem, if the investment is compounded quarterly.Formulas Compound interestAnnual compoundingM = C(1+i)n1 = CniM = C(1 + i)Fractional capitalizationM=C{1+4)*

Compound = p = Quarterly = 4Initial Investment = c = $155,000Interest rate = i = 21%Time = n = 7…

Answered: 2. Calculate the amount of the previous…

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2. Calculate the amount of the previous problem, if the investment is compounded quarterly.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

100%

Step 1: Given Value
Initial Investment = c = $155,000
Compound = yearly
Interest rate=i = 21%
Time = n = 7 years
Step 2: calculation
Future Value = c*(1+r)^n
= 155,000*(1 + 0.21)^7
= 155,000 * 3.79749833583
= 588,612.242054
= $588,612.24
Solution
Thus, the amount of the investment after 7 years would be $588,612.24

SOLVE STEP BY STEP IN DIGITAL FORMAT
2. Calculate the amount of the previous problem, if the investment is compounded quarterly.
Formulas Compound interest
Annual compounding
M = C(1+i)n
1 = Cni
M = C(1 + i)
Fractional capitalization
M=C{1+4)*

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