Hao made a single investment which, after 4 years invested at 12% compounded sem
ID: 2596062 • Letter: H
Question
Hao made a single investment which, after 4 years invested at 12% compounded semiannually, has accumulated to $234,900. How much did Hao invest initially? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
a. 230,045
b. 168,585
c. 234,898
d. 147,376
e. 19,460
Molly borrows money by promising to make a single payment of $116,000 at the end of 4 years. How much money is Molly able to borrow if the interest rate is 12%, compounded semiannually? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
a. 72,778
b. 43,166
c. 84,150
d. 87,046
e 73,592
Explanation / Answer
1.We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.
234900=P(1+0.12/2)^(2*4)
P=234000/(1+0.12/2)^(2*4)
=$147376(Approx).
2.
116000=P(1+0.12/2)^(2*4)
P=116000/(1+0.12/2)^(2*4)
=$72778(Approx).
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.