Question

Pronghorn invested $270000 she received from her grandmother today in a fund that is expected to earn 6% per annum. To what amount should the investment grow in five years if interest is compounded semi-annually?

Answer 1

FV= $362,857.42

Step-by-step explanation:

Giving the following information:

Initial investment (PV)= $270,000

Number of periods (n)= 5*2 = 10 semesters

Interest rate (i)= 0.06/2 = 0.03

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

FV= PV*(1+i)^n

FV= 270,000*(1.03^10)

FV= $362,857.42