The future value of $50,000 invested today, at the end of 10 years assuming an interest rate of 7.5 percent per year, with semiannual compounding, is
A) $104,407.60.
B) $103,051.58.
C) $123,510.52.
D) $210,673.43.
E) $105,117.46.

Question

Quizplus · Accepted Answer

The future value of $50,000 invested today, at the end of 10 years assuming an interest rate of 7.5 percent per year, with semiannual compounding, is $104,407.60.The formula for the future value of an investment with semiannual compounding is:FV = PV * (1 + r/2)^(2n)where:PV is the present value of the investmentr is the annual interest raten is the number of yearsIn this case, the present value is $50,000, the annual interest rate is 7.5%, and the number of years is 10. Plugging these values into the formula, we get:FV = 50000 * (1 + 0.075/2)^(2*10)= 50000 * (1.0375)^20= 50000 * 1.044076= $104,407.60

The Future Value of $50,000 Invested Today, at the End