Читать книгу Fundamentals of Financial Instruments - Sunil K. Parameswaran - Страница 92

Simone Peters has deposited $25,000 for four years in an account that pays a nominal annual interest of 8% per annum with quarterly compounding. What is the future value of her investment?

8% per annum for four years is equivalent to 2% per quarter for 16 quarterly periods. Thus the required factor is FVIF(2,16) and not FVIF(8,4).

Thus the future value of

Note 4: The FVIF is given in the form of tables in most textbooks, for integer values of the interest rate and number of time periods. If, however, either the interest rate or the number of periods is not an integer, then we cannot use such tables and would have to rely on a scientific calculator or a spreadsheet.