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Math Help - compound future value

  1. #1
    Newbie
    Joined
    Nov 2005
    Posts
    11

    Question help!!!

    How do you figure out compound future value!!!
    Time 3 years
    Principal $2,000
    Rate 12%
    Compounded Semiannually
    Amount ?
    Interest ?

    Could someone give me any idea how to figure this out.
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  2. #2
    Junior Member
    Joined
    Oct 2005
    Posts
    27
    How do you figure out compound future value!!!
    Time 3 years
    Principal $2,000
    Rate 12%
    Compounded Semiannually
    Amount ?
    Interest ?

    We need to convert the annual interest into the rate for each period of compounding: The semiannual interest = .06
    There are 6 semiannual compounding periods in 3 years
    FV= P(1+k)^n
    FV = 2000(1.06)^6

    To find the interest, subtract the future value minus principal invested.
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