Answer:
The future value of this initial investment after the six year period is $2611.6552
Step-by-step explanation:
Consider the provided information.
A student desired to invest $1,540 into an investment at 9% compounded semiannually for 6 years.
Future value of an investment: [tex]FV=P(1+r)^n[/tex]
Where Fv is the future value, p is the present value, r is the rate and n is the number of compounding periods.
9% compounded semiannually for 6 years.
Therefore, the value of r is: [tex]r=\frac{0.09}{2}=0.045[/tex]
Number of periods are: 2 × 6 = 12
Now substitute the respective values in the above formula.
[tex]FV=1540(1+0.045)^{12}[/tex]
[tex]FV=1540(1.045)^{12}[/tex]
[tex]FV=1540(1.69588)[/tex]
[tex]FV=2611.6552[/tex]
Hence, the future value of this initial investment after the six year period is $2611.6552
