Answer: The difference in the two future values is $2703.79.
We arrive at the answer at follows:
We need to find the future value of these investments.
A. First investment Plan
We have
Principal $25,000
Interest rate per year (i) 12%
No. of years (n) 7
No. of compounding periods per year (m) 12 (monthly)
We can compute the Future Value (FV) of this investment with the following formula:

Substituting the relevant values in the formula above we get,




B. Second investment Plan
We have
Principal $25,000
Interest rate per year (i) 13%
No. of years (n) 7 No. of compounding periods per year (m) 2 (semi-annual)
We can compute the Future Value (FV) of this investment with the following formula:

Substituting the relevant values in the formula above we get,




C. Difference between the two Future values


