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The interest rate quoted by a bank is 5.00% APR, compounded semi-annually. You decide to invest $10,000 (today, now) with this bank. Part A. What
The interest rate quoted by a bank is 5.00% APR, compounded semi-annually. You decide to invest $10,000 (today, now) with this bank. Part A. What is the future value of your investment in 5 years, assuming that the interest rate will not change for the five years? Part B. Assume the interest rate (APR) itself will be increasing by 2% per year. What is the future value of your investment in ten years? (E.g. In year #2 the interest rate is 5.00% x 1.02 = 5.1%.)
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