Question

If $12,000 is invested at 4.5% for 20 years, find the future value if theInterest is compounded…Annually 3a)28,940.57Semiannually 3b)Quarterly 3c)_________Monthly 3d)29,456.60Continuously 3e)_________

Answer 1

(a): Given:

There are given that the present value is $12000 and interest is 4.5% and 20 years.

Explanation;

To find future value, we need to use the future value formula;

Then,

From the formula of future value for annually:

`FV=PV(1+r)^n`

Where,

`\begin{gathered} PV=12000 \\ r=0.045 \\ n=20 \end{gathered}`

Then,

Put the values into the above formula:

So,

`\begin{gathered} FV=PV(1+r)^(n) \\ FV=12000(1+0.045)^(20) \\ FV=12000(1.045)^(20) \end{gathered}`

Then,

`\begin{gathered} FV=12,000(1.045)^(20) \\ FV=28940.568 \end{gathered}`

Final answer:

Hence, the future value is shown in below:;

`FV=28,940.568`