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Jun 10th, 2015

Present Value (PV)= $1200

Interest (r)=
6% compounded semiannually

Number
of periods(n)= 25 years

Because
the interest is compounded semiannually, we convert 25 years to
50 semiannual periods, and the annual interest rate of 6% to
the semiannual rate of 3%.

FV=
PV * (1+r)^n FVIF for n=50 and r =3 %

FV=$1200*(1.03)^50

Fv=1200(4.384)

Fv
= $5260.8

Jun 10th, 2015

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