Asked by Lorre Taylor on May 25, 2024
Verified
Joseph Patrik will deposit enough money today so that his account will contain $30,000 in 15 years. The account will pay interest at 12% compounded semiannually. Compute the interest (in dollars) that Patrik will earn during the 15 years. (Use Tables 16-1A&B or 16-2A&B or a calculator.)
Compounded Semiannually
The process of applying interest to both the initial principal and accumulated interest over two periods within a year.
Present Value
The valuation today of a future financial sum or series of cash movements, taking into account a predetermined return rate.
Future Value
The estimated value of a current asset or amount of money at a specified date in the future, taking into account factors like interest rates or stock growth.
- Become proficient in the theory of present value and its association with future investing activities.
- Attain skills in using financial tables and calculators for determining future values and compound interest.
- Attain knowledge on the concept of compound interest and its calculation process.
Verified Answer
$30,000 - $5,223.30= $24,776.70 interest
Learning Objectives
- Become proficient in the theory of present value and its association with future investing activities.
- Attain skills in using financial tables and calculators for determining future values and compound interest.
- Attain knowledge on the concept of compound interest and its calculation process.
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