Question

If $1743 is invested at 5.45% for 2 years, find the future value if the interest is compounded semi-annually. Round to the nearest

cent.
Do not put the $ in your answer or any units. Only put the number value for your answer.
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Answer 1

The future value of an investment is calculated by using the formula:

$FV = PV(1 + r/n)^{nt}$

where $FV$ is the future value, $PV$ is the present value (the initial investment), $r$ is the interest rate, $n$ is the number of times the interest is compounded per year, and $t$ is the number of years the investment is held.

In this case, we have $PV = 1743$, $r = 5.45% = 0.0545$, $n = 2$, and $t = 2$. Plugging these values into the formula, we get:

$FV = 1743(1 + 0.0545/2)^{2 \cdot 2} = 1743(1 + 0.0273)^{4}$

Now we can calculate the future value by raising $1 + 0.0273$ to the power of 4:

$FV = 1743(1.0273)^{4} \approx \boxed{1956}$

Note that we rounded the result to the nearest cent.

Explanation: