What will $142,000 grow to be in 6 years if it is invested today in an account with a quoted annual interest rate of 14% with monthly compounding of interest? $399,341.00 $311,686.11 $327,328.69 $284,631.76 $468,734.69

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 1P
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What will $142,000 grow to be in 6 years if it is invested today in an account with a
quoted annual interest rate of 14% with monthly compounding of interest?
$399,341.00
$311,686.11
$327,328.69
$284,631.76
$468,734.69
Transcribed Image Text:What will $142,000 grow to be in 6 years if it is invested today in an account with a quoted annual interest rate of 14% with monthly compounding of interest? $399,341.00 $311,686.11 $327,328.69 $284,631.76 $468,734.69
Expert Solution
Step 1

Present value (PV) = $142000

Interest rate = 14%

Monthly interest rate (r) = 14%/12 = 1.16666666666667%

Period = 6 Years

Monthly period (n) = 6*12 = 72

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