You place $40,000 in an investment account today that earns 5% compounded semiannually. How much vill be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4
You place $40,000 in an investment account today that earns 5% compounded semiannually. How much vill be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4
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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![1. You place $40,000 in an investment account today that earns 5% compounded semiannually. How much
will be in the account after (a) three years, (b) four years, or (c) five years?
Formulas should include the =FV function and return a POSITIVE value.
Initial investment
Additional amount invested at the end of each semiannual period
Interest rate
Compounded semiannually
Account balance at the end of:
$40,000
$0
5%
2 Compounding periods per year
a)
Year 3
b)
Year 4
c)
Year 5
2. If, in addition to the $40,000 original investment, you invest an additional $1,000 at the end of each
semiannual period, how much will be in the account after (a) three years, (b) four years, or (c) five years?
Formulas should include the =FV function and return a POSITIVE value.
Additional amount invested at the end of each semiannual period
Account balance at the end of:
$1,000
a)
Year 3
b)
Year 4
c)
Year 5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F782dc1ea-a325-438a-8439-b06822464c0e%2Fb79bec0f-1625-4d95-8814-7774c04cae51%2F9iqcqmw_processed.png&w=3840&q=75)
Transcribed Image Text:1. You place $40,000 in an investment account today that earns 5% compounded semiannually. How much
will be in the account after (a) three years, (b) four years, or (c) five years?
Formulas should include the =FV function and return a POSITIVE value.
Initial investment
Additional amount invested at the end of each semiannual period
Interest rate
Compounded semiannually
Account balance at the end of:
$40,000
$0
5%
2 Compounding periods per year
a)
Year 3
b)
Year 4
c)
Year 5
2. If, in addition to the $40,000 original investment, you invest an additional $1,000 at the end of each
semiannual period, how much will be in the account after (a) three years, (b) four years, or (c) five years?
Formulas should include the =FV function and return a POSITIVE value.
Additional amount invested at the end of each semiannual period
Account balance at the end of:
$1,000
a)
Year 3
b)
Year 4
c)
Year 5
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