question archive What is the value of $2000 after one year, if bank compounding half yearly and offered rate is 10%?
What is the value of $2000 after one year, if bank compounding half yearly and offered rate is 10%?
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What is the value of $2000 after one year, if bank compounding half yearly and offered rate is 10%?
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Half yearly rate = 10% / 2 = 5%
Number of periods = 1 * 2 = 2
Future value = Present value (1 + rate)^periods
Future value = 2,000 (1 + 0.05)^2
Future value = 2,000 * 1.1025
Future value = $2,205
