What is the future value of $20,000 received today, after 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years?
A)$25,000
B)$31,000
C)$32,772
D)$34,567
E)$38,817

Question

Quizplus · Accepted Answer

The future value of $20,000 received today, after 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years is $34,567.The future value of $20,000 invested at 6% compounded annually for six years is $20,000 * (1 + 0.06)^6 = $26,333.The future value of $26,333 invested at 5% compounded semi-annually for four years is $26,333 * (1 + 0.05/2)^(4*2) = $34,567.

What Is the Future Value of $20,000 Received Today, After