Compound Interest-1 (similar to) Question Help for se he Future Value or moun of

Question

Compound Interest-1 (similar to) Question Help for se he Future Value or moun of S 0 Table or the uur ale and compound interest rmula Find the u ure value and compound interest on $5 000 a 5% compounded sem annual, Future Value 0r Compound Amount of $1.00. novears o m un Future value = SL (Round to the nearest cent as needed.) Data Table Table Future Value or Compound Amount of $1.00 Rate per period Periods 1% 1.5% 2% 2.5% 3% 4% 5% 6% 8% 1.01000 1.01500 1.02000 1.02500 1.03000 1.04000 105000 1.06000 1.08000 2 1.02010 1.03023 1.04040 1.05063 1.06090 1.08160 1.10250 1.12360 1.16640 3 1.03030 1.04568 1.06121 1.07689 1.09273 1.12486 1.15763 1.19102 1.25971 4 1.04060 1.06136 1.08243 1.10381 1.12551 1.16986 1.21551 1.26248 1.36049 5 1.05101 1.07728 1.10408 1.13141 1.15927 1.21665 1.27628 1.33823 1.46933 Table shows future value (FV) of $1.00 compounded for N periods at R rate per period Table values can be generated using the formula FV $11+R)N Print Done Enter your answer in the answer box and then click Check Answer

Explanation / Answer

We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=$5000(1+5/200)^(2*2)

=$5000(1.025)^4

=$5000*1.10381

Future value =$5519.05

Compound interest=A-P

=($5519.05-$5000)=$519.05(approx)

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