1-a. Calculate the future value at the end of six years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)

Complete Question:

Calculate the future value at the end of six years of an investment of $605,000 made on January 1, 2020.  The investment compounds interest semi-annually at the rate of 8% per annum. FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)

The future value of the investment is:

$968,624.49

Explanation:

a) Data and Calculations:

Present value of the investment = $605,000

Interest rate = 8% p.a.

Interest is compounded semi-annually (or 2 times in a year)

Period of investment = 12 (6 x 2)

Using an online finance calculator:

FV (Future Value)$968,624.49

PV (Present Value)$605,000.00

N (Number of Periods)12.000

I/Y (Interest Rate)4.000%

PMT (Periodic Payment)$0.00

Starting Investment$605,000.00

Total Principal$605,000.00

Total Interest$363,624.49