The future value of a $1,000 investment where interest is compounded annually for eight (8) years at 12 percent may be calculated with the following formula:

FV=$1,000 * (1 + 12%)^8

or

FV = $1,000 * (1 + 12%)⁸

If the same $1,000 was compounded semi-annually, what formula would you use to calculate the FV?

Using only the information in the table below, what would the IRR be for an investment that cost $750 in period 0 and was sold for $1,000 in period 4? Present Value Factor for Reversion of $1

Period 6% 7% 8% 9% 10% 1 0.943396 0.934579 0.925926 0.917431 0.909091 2 0.889996 0.873439 0.857339 0.841680 0.826446 3 0.839619 0.816298 0.793832 0.772183 0.751315 4 0.792094 0.762895 0.735030 0.708425 0.683013 5 0.747258 0.712986 0.680583 0.649931 0.620921 6 0.704961 0.666342 0.630170 0.596267 0.564474

A. between 9% and 10%

B. between 6% and 7%

C. between 7% and 8%

D. between 8% and 9%