Chapter AD, Problem AD.2BE

(1)

To determine

Future Value: The future value is value of present amount compounded at an interest rate until a particular future date. The following formula is used to calculate the future value of an amount:

$\text{Future value of an amount = Present value}\times {\left(\text{1+ Interest rate}\right)}^{\text{Number}\text{of}\text{periods}}$

Compound interest: The amount of interest received or earned for multiple-interest time periods, on the sum of principal plus interest earned in that period, for one term is referred to as compound interest.

To Indicate: The interest rate and the number of years invested (annually and semi-annually).

(2)

To determine

To Indicate: The interest rate and the number of years invested (annually and semi-annually).