To what amount will the investment grow in 4 years? To what amount would the investment grow in 4 years if the fund earns 8% annual interest compounded semiannually? (Round factor values to 5 decimal places, e. g. 1.25124 and final answers to 0 decimal places, e. g. 458,581.)

Instructions are listed below.

Explanation:

We weren't provided with enough information to answer the requirements. But, I will give the formulas for different situations and a small example to guide an answer.

There are two different ways to invest in order to reach the desired goal. One is a lump sum amount and others are timely deposits (annual, semiannual, quarterly, etc).

Lump-sum:

To calculate the final value, we need to use the following formula:

FV = PV * (1+i) ^n

For example, imagine a lump sum deposit of $5,000 for 5 years at an interest rate of 8% compounded annually:

FV = 5,000 * (1.08^5) = $7,346.64

Now, if the interest rate is semiannually.

n = 2*5=10

i = 0.08/2 = 0.04

FV = 5,000 * (1.04^10) = $7,401.22

Timely deposit:

FV = {A*[ (1+i) ^n-1]}/i

A = annual deposit

For example, imagine an annual deposit of $1,000 for 5 years at an interest rate of 8% compounded annually:

FV = {1,000*[ (1.08^5) - 1]} / 0.08 = $5,866.60