the future value of an investment of $1,500 made today for the following rates and periods:    a

Computation of Future Value:

Future Value = Present Value*(1+Rate/Number of Periods)^(Time*Number of Periods)

a. 6.25 percent compounded semiannually for 12 year:

Future Value = $1,500*(1+6.25%/2)^(12*2)

= $1,500*2.0928

Future Value = $3,139.25

b. 7.63 percent compounded quarterly for 6 years:

Future Value = $1,500*(1+7.63%/4)^(6*4)

= $1,500*1.5738

Future Value = $2,360.69

d. 10 percent compounded daily for 3 years:

Future Value = $1,500*(1+10%/365)^(3*365)

= $1,500*1.3498

Future Value = $2,024.71

e. 8 percent compounded continuously for 2 years:

Future Value = Pe^rt

Here,

P = Present Value = $1,500

r = Interest Rate = 8%

t = Time = 2 years

Future Value = $1,500e^(8%*2) = $1,760.27