Finance Help

2. Anthony and Michelle Constantino just got married and received $20,000 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 10 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? Click on the table icon to view the FVIF table 1 If they place half of this money, PV, in a fixed rate investment earning 10 percent compounded annually, the amount they will have, FV, on their twenty-fifth anniversary is $ (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.) O A. Smaller. The greater the number of compounding periods per year, the smaller the impact of compound interest, all else equal. O B. Larger. The greater the number of compounding periods per year, the larger the impact of compound interest, all else equal. OC. 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 $ (Round to the nearest cent.) 1: Data Table 1% 2% 3% 4% 7% 8% 9% 10% 3.5% 1.035 1 1.060 1.080) 2 1.020 1.040 1.061 1.030 1.061 1.093 1.040 1.082 1.125 Compound Sum of $1 (FVIF) 5% 6% 1.050 1.103 1.158 1.216 1.276 1.340 1.070 1.145 1.225 1.166 1.260 1.090 1.188 1.295 3 1.010 1.020 1.030 1.041 1.051 1.062 1.072 1.124 1.191 1.262 1.338 1.100 1.210 1.331 1.464 1.611 1.772 4 1.126 1.082 1.104 1.126 1.311 1.403 5 1.170 1.217 1.265 1.360 1.469 1.159 1.412 1.539 1.677 6 1.194 1.419 1.504 1.501 1.606 1.587 1.714 7 1.149 1.230 1.316 1.828 1.071 1.109 1.148 1.188 1.229 1.272 1.317 1.363 1.411 1.460 1.511 1.564 8 1.267 1.718 1.407 1.477 1.551 1.629 9 10 1.172 1.195 1.219 1.243 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.594 1.689 1.791 1.898 1.993 2.172 2.367 1.838 1.967 2.105 1.369 1.423 1.480 1.539 1.601 1.665 1.732 1.851 1.999 2.159 2.332 11 1.949 2.144 2.358 2.594 2.853 1.710 1.305 1.344 1.384 1.426 1.469 1.513 2.580 12 1.268 3.138 1.796 1.886 13 1.294 1.319 2.012 2.133 2.261 2.252 2.410 2.579 2.518 2.720 2.937 2.813 3.066 3.342 3.452 3.797 14 1.619 1.980 2.079 15 1.675) 1.801 3.172 3.642 1.346 1.373 1.558 1.605 16 1.734 17 2.397 2.540 2.693 2.854 1.400 1.795 1.161 1.173 1.184 1.196 1.208 1.220 1.232 1.653 1.702 18 19 1.857 2.759 2.952 3.159 3.380 3.617 3.870 1.873 1.948 2.026 2.107 2.191 2.279 2.183 2.292 2.407 2.527 2.653 1.428 1.457 3.426 3.700 3.996 4.316 4.661 5.034 3.970 4.328 4.717 5.142 5.604 4.177 4.595 5.054 5.560 6.116 6.727 7.400 3.026 1.923 1.990 20 1.754 1.806 1.860 1.4861 21 1.516 2.786 3.207 3.400 3.604 6.109 22 1.245 1.916 2.370 5.437 1.546 1.577 6.659 4.141 4.430 4.741 2.925 3.072 23 2.059 2.132 2.206 2.283 2.363 1.974 1.257 1.270 2.465 7.258 7.911) 2.033 8.140 8.954) 9.850 10.835 2.563 3.225 3.820 4.049 4.292 24 25 1.608 1.641 5.871 6.341 6.848 5.072 5.427 1.282 2.094 2.666 3.386 8.623 30 1.348 1.811 2.427 3.243 4.322 5.743 7.612 10.063 13.268 17.449 40 2.208 4.801 2.807 3.959 5.585 10.286 14.974 21.725 1.489 1.645 45.259 3.262 4.384 7.040 11.467 31.409 74.358 50 2.692 7.107 18.420 29.457 46.902 117.391