Question

if the annual percentage rate is 13% compounded weekly. Given the EAR of 13.86%, what is the future value of $2,000 invested at an annual percentage rate of 13% compounded weekly for 7 years?

Answer 1

D A 25 Amount deposited,PV $ 2,000 26 Interest Rate, 0.25% per week 27 No. of period, n 364 weeks 28 29 Future value = Present value *((1+k)an 30 $ 4,963 31 32 OR 33 Using excel function for FV, 34 FV=FV(rate,nper,pmt, pv, type) 35 $ 4,963 36

A B 2000 =13%/52 =7*52 per week weeks Present value *((1+k)an =B25*((1+B26)^B27) 25 Amount deposited,PV 26 Interest Rate, 27 No. of period, 28 29 Future value = 30 31 32 OR 33 Using excel function for FV, 34 FV=FV(rate, nper,pmt, pv, type) 35 =FV(B26,827,0,-B25,0) 36

Here, Fv is the future value of amount invested rate is the periodic interest rate nper is no. of periods pmt is the periodic payments Pv is the present value of investmet type = 0 if the amount is paid at the end of the year 1 if it is paid at the beginning.

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