16 at the end of 24 months 2 years he will have 11699

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Unformatted text preview: und an institution that will pay him 8% interest compounded quarterly. If he leaves his money in this account for 24 months (2 years), he will be paid 2% interest compounded over eight periods, each of which is 3 months long. Table 4.6 uses interest factors to show the amount Fred TABLE 4.6 The Future Value from Investing $100 at 8% Interest Compounded Quarterly Over 24 Months (2 Years) Beginning principal (1) Future value interest factor (2) Future value at end of period [(1) (2)] (3) 3 months $100.00 1.02 $102.00 6 months 102.00 1.02 104.04 9 months 104.04 1.02 106.12 12 months 106.12 1.02 108.24 15 months 108.24 1.02 110.40 18 months 110.40 1.02 112.61 21 months 112.61 1.02 114.86 24 months 114.86 1.02 117.16 Period CHAPTER 4 TABLE 4.7 Time Value of Money 155 The Future Value at the End of Years 1 and 2 from Investing $100 at 8% Interest, Given Various Compounding Periods Compounding period End of year Annual Semiannual Quarterly 1 $108.00 $108.16 $108.24 2 116.64 116.99 117.16 will...
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This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

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