Anthony and Michelle Constantino just got married and received $37,000 in cash gifts for their wedding. How much will they have on their twenty-fifth anniversary if they place half of this money in a fixed-rate investment earning 6 percent compounded annually? Would the future value be larger or smaller if the compounding period was 6 months? How much more or less would they have earned with this shorter compounding period?

If they place half of this money, PV, in a fixed rate investment earning 6 percent compounded annually, the amount they will have, FV, on their twenty-fifth anniversary is $_____ enter your response here. (Round to the nearest cent.)

Would the future value be larger or smaller if the compounding period was 6 months? (Select the best choice below.)

A. Larger. The greater the number of compounding periods per year, the larger the impact of compound interest, all else equal.

B. Smaller. The greater the number of compounding periods per year, the smaller the impact of compound interest, all else equal.

C. Equal. The number of compounding periods per year does not influence the future value.

The additional amount they would have earned with this shorter compounding period is $_____ enter your response here.

(Round to the nearest cent.)