Question

Solve the following problems using either Tables 11-1 or 11-2 from your text. When necessary, create new table factors. (Round new table factors to five decimal places, round dollars to the nearest cent and percents to the

Table 11-1: Compound Interest Table (Future Value of $1 at Compound Interest) (1 of 2) CENGAGE Table 11-1: Compound Interest Table (Future Value of $1 at Compound Interest) (2 of 2) Periode 15 1037 1.17250 1262372710471 122.1997 2.5403 2952924354 10 110 1130400040 22 TT 120017 100 1.12415130734 1.4303510043 2.0 2.400 1.000 1.33805458811753512.100 2 .20 3.00 4. 15 201.01.2007 1.348340800 1.00 2.197122.03.201143.00 4.0079 20 1.232370SBODT 2 495033 1.1 1.24121.3875 545081916102.2 2. 3.335 4.430 5. 454 0 360248412307182 231 .20 12140630 24 12 1429 120 480 RL 2092992 32250 5022171 200 25 CENGAGE EXHIBIT 11-3: Compounding Periods per Year Compounding Periods per Year Interest Compounded Annual Semiannually Quarterly Monthly Daily Continuously Every year Every months Every 3 months Every month Every day 365 Infinite

nearest hundredth of a percent)

Refer to Narrative 11-1. George invests $12,500, at 12% interest, semiannually for 12 years. Calculate the compound amount for his investment.

Answer 1

Semi-annual interest rate = 12%/2 = 6%

Number of semi-annual periods = 12*2 = 24 periods

Compound amount or future value = Present value*Future value factor

= 12500*FVF(6%, 24 periods)

= 12500*4.04893

= $50,611.625
i.e. $50,611.63