Horizon Capital Corp. receives a one-time strategic investment of $875,000 from a venture partner. The funds are placed into a specialized growth portfolio that compounds semi-annually at a nominal annual rate of 7.85%. The investment horizon is 9.5 years, requiring careful handling of the fractional period.
Correct Answers
future_value
$1,818,396.90
Step-by-Step Solution
Future Value Formula: FV = PV × (1 + r)^n Present Value (PV): $875,000.00 Rate per period (r): 3.9250% Periods (n): 19 FV = $875,000.00 × (1 + 3.9250%)^19 FV = $875,000.00 × 2.078168 FV = $1,818,396.90