Question

Assume Waterway Industries deposits $82000 with First National Bank in an account earning interest at 6% per annum, compounded semi-annually. How much will Waterway have in the account after 6 years if interest is reinvested?

a. $116,912
b. $111,520
c. $116,320
d. $82,000

Answer 1

FV= $116,912.40

Step-by-step explanation:

Giving the following information:

Initial investment= $82,000

Number of periods= 6*2= 12 semesters

Interest rate= 0.06/2 = 0.03

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

FV= 82,000*(1.03^12)

FV= $116,912.40