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You place $40,000 in an investment account today that earns 5% compounded semiannually. How much vill be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4

You place $40,000 in an investment account today that earns 5% compounded semiannually. How much vill be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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1. You place $40,000 in an investment account today that earns 5% compounded semiannually. How much will be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4 c) Year 5 2. If, in addition to the $40,000 original investment, you invest an additional $1,000 at the end of each semiannual period, how much will be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Additional amount invested at the end of each semiannual period Account balance at the end of: $1,000 a) Year 3 b) Year 4 c) Year 5
Transcribed Image Text:1. You place $40,000 in an investment account today that earns 5% compounded semiannually. How much will be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Initial investment Additional amount invested at the end of each semiannual period Interest rate Compounded semiannually Account balance at the end of: $40,000 $0 5% 2 Compounding periods per year a) Year 3 b) Year 4 c) Year 5 2. If, in addition to the $40,000 original investment, you invest an additional $1,000 at the end of each semiannual period, how much will be in the account after (a) three years, (b) four years, or (c) five years? Formulas should include the =FV function and return a POSITIVE value. Additional amount invested at the end of each semiannual period Account balance at the end of: $1,000 a) Year 3 b) Year 4 c) Year 5
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