Pinnacle Industrial Group invests $875,000 in a specialized equipment-manufacturing fund that compounds semi-annually at an annual rate of 7.4%. The company plans to liquidate this investment after 9.5 years to fund a facility expansion. Calculate the future value of this lump-sum investment, accounting for the fractional compounding period.
Correct Answers
future_value
$1,745,036.13
Step-by-Step Solution
Future Value Formula: FV = PV × (1 + r)^n Present Value (PV): $875,000.00 Rate per period (r): 3.7000% Periods (n): 19 FV = $875,000.00 × (1 + 3.7000%)^19 FV = $875,000.00 × 1.994327 FV = $1,745,036.13