What is the compound amount and compound interest of $36,000 invested at 12% com- pounded semiannually for 7 years? NOTE: Excel will provide greater accuracy with the compound interest formula than may be obtained by using Table 11-2. Therefore, answers will differ slightly from those in the book.

What is the compound amount and compound interest of $36,000 invested at 12% com- pounded semiannually for 7 years? NOTE: Excel will provide greater accuracy with the compound interest formula than may be obtained by using Table 11-2. Therefore, answers will differ slightly from those in the book.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

What is the compound amount and compound interest of $36,000 invested at 12% com-
pounded semiannually for 7 years? NOTE: Excel will provide greater accuracy with the
compound interest formula than may be obtained by using Table 11-2. Therefore, answers
will differ slightly from those in the book.
Compoun
Compound- d Amount
(us-ing
formula)
Term of
Investmen Nominal ing Periods
Rate (%)
Compound
Principal
t (years)
in a Year
Interest
Compoun
d Amount
(us-ing
table)
Table 11-1 Value =

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