Complete Question:
Calculate the future value at the end of six years of an investment of $605,000 made on January 1, 2020. The investment compounds interest semi-annually at the rate of 8% per annum. FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)
Answer:
The future value of the investment is:
$968,624.49
Explanation:
a) Data and Calculations:
Present value of the investment = $605,000
Interest rate = 8% p.a.
Interest is compounded semi-annually (or 2 times in a year)
Period of investment = 12 (6 x 2)
Using an online finance calculator:
FV (Future Value) $968,624.49
PV (Present Value) $605,000.00
N (Number of Periods) 12.000
I/Y (Interest Rate) 4.000%
PMT (Periodic Payment) $0.00
Starting Investment $605,000.00
Total Principal $605,000.00
Total Interest $363,624.49
