Get comprehensive solutions to your questions with the help of IDNLearn.com's experts. Join our knowledgeable community to find the answers you need for any topic or issue.
a) The future value if the interest is compounded semiannually = $12432
b) The future value if the interest is compounded annually = $12389
The future value for compound interest is given as:
[tex]FV=P(1+\frac{r}{n})^{nt}[/tex]
The amount invested is the principal
The principal, P = $8704.56
The rate, r = 4% = 0.04
The interest is compounded semiannually
n = 2
Time, t = 9 years
Substitute these parameters into the equation above
[tex]FV=8704.56(1+\frac{0.04}{2})^{2(9)}\\\\FV=8704.56(1.02)^{18}\\\\FV=\$12432[/tex]
b) The future value if the interest is compounded annually
n = 1
[tex]FV=8704.56(1+\frac{0.04}{1})^{1(9)}\\\\FV=8704.56(1.04)^{9}\\\\FV=\$12432\\\\FV=\$12389[/tex]
Learn more here: https://brainly.com/question/25805668