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Find the future value of $50,000 at 6% compounded semiannually for ten years.

1 Answer

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Answer: $ 90305.56

Explanation:

To find the future value of the amount, use the compound interest formula as follows:

A = P( 1 + i/m)^mn

Where; A = Future amount after n years;

P = Principal amount or amount deposited which is equal to $50, 000 in this question.

i = interest rate charge which is 6% in this case

m = number of times compounded per year, thus, m = 2 in this case since it is compounded semi-annually.

n = number of years which is 10 years in this case.

Substituting in the equation:

A = 50 000( 1 + 0.06/2) ^ 2(10)

= $ 90305.56

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