Question 1 Calculate the future value of an investment of 10

Question 1

Calculate the future value of an investment of $1,000, after 6 months, earning 6% APR, compounded monthly, by compounding manually.

Reminder: Be sure to show your work, and to calculate the period interest before solving.

Solution

FORMULA A=P[1+{R/(100T)}]^(NT) WHERE A= AMOUNT IN FUTURE P=PRINCIPAL = 1000 R=RATE OF INTEREST PER YEARIN % = 6% T=NUMBER OF COMPOUNDING PERIODS PER YEAR =12 [MONTHLY COMPOUNDING] N=NUMBER OF YEARS =0.5 SO WE GET