Jennifer Toby, owner of a local Subway shop, loaned $25,000 to Mike Roy to help him open a Subway franchise. Mike plans to repay Jennifer at the end of 7 years with 4% interest compounded semiannually. How much will Jennifer recieve at the end of 7 years?
2007-12-12 14:18:24 · 2 answers · asked by Hiphopaction 2 in Business & Finance ➔ Corporations
She would receive $32,986.97 (rounded to 2 decimal places) at the end of the 14th interest period. 7 years compounded semiannually means there will be 14 interest periods.
Start 25,000.00
1st 25,500.00
2nd 26,010.00
3rd 26,530.20
4th 27,060.80
5th 27,602.02
6th 28,154.06
7th 28,717.14
8th 29,291.48
9th 29,877.31
10th 30,474.86
11th 31,084.36
12th 31,706.04
13th 32,340.17
14th 32,986.97
2007-12-12 14:34:50 · answer #1 · answered by Sandy 7 · 1⤊ 0⤋
Four percent semiannually means 2 percent per six months. Seven years means fourteen six-month periods.
The answer is 25000*(1+0.02)^14, or 25000*1.31947, or 32,986.969
2007-12-12 14:35:59 · answer #2 · answered by Andre 1 · 1⤊ 0⤋