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Zanzabum
3 years ago
10

FV of $600 each 6 months for 5 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations.

Round your answer to the nearest cen
Business
1 answer:
Lerok [7]3 years ago
8 0

Answer:

Amount after 5 year will be $1074.5

Explanation:

We have given principal amount P = $600

Time t = 5 year

Rate of interest r = 12%

It is given that amount is compounded semiannually

So time period = 5×2 = 10 period

And rate of interest semiannually will be =\frac{12}{2}=6 %

We have to find future value after 5 year

Future value is given by A=P(1+\frac{r}{100})^n

So A=600\times (1+\frac{6}{100})^{10}

=600\times1.06^{10}

=600\times1.79=1074.5

So amount after 5 year will be $1074.5

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