The future value of $200 deposited today in an account for four years paying semiannual interest when the annual interest rate is 12% is:
A)$309.40.
B)$318.80.
C)$320.20.
D)$296.00.

Question

Quizplus · Accepted Answer

The future value is calculated using the formula FV = PV * (1 + r/n)^(nt), where PV is the present value ($200), r is the annual interest rate (0.12), n is the number of compounding periods per year (2 for semiannual), and t is the number of years (4). Plugging in the values: FV = 200 * (1 + 0.12/2)^(2*4) = 200 * (1.06)^8 = $318.80.

The Future Value of $200 Deposited Today in an Account