What is the future value of $5,900 invested for 8 years at 5 percent compunded quarterly? Select one: a $8,196 b

Finance Jan 17, 2021

What is the future value of $5,900 invested for 8 years at 5 percent compunded quarterly? Select one: a $8,196 b. $97,779.70 c. $8,170.40 d.$8,779.97

Expert Solution

The future value is computed as shown below:

= Present value x (1 + interest rate) ^{time period}

= $ 5,900 x (1 + 0.05 / 4) ^{8 x 4} (Since the interest is compounded quarterly, hence interest rate is divided by 4 and time period is multiplied by 4)

= $ 5,900 x 1.0125³²

= $ 5,900 x 1.488130509

= $ 8,779.97

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote