To what amount would the investment grow in 3 years if the fund earns 8% annual interest compounded
QUESTION
BE6-1 Chris Spear invested $15,000 today in a fund that earns 8% compounded annually. To what amount will the investment grow in 3 years? To what amount would the investment grow in 3 years if the fund earns 8% annual interest compounded semiannually?
Future
value = Present Value * ((1 rate of interest)^Time) Future value = $15,000 * ((1 8%)^3) = $18895.68 The future value when fund earns 8% compounded annually is$18895.68 Future
alue = $15,000 * ((1 (8%/2))^(3*2)) = $18,979.79 The future value when fund earns 8% compounded semi-annually is$18,979.79
ANSWER:
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