The Future Value of $1,000 Compounded Annually for 8 Years

question 9

Multiple Choice

The future value of $1,000 compounded annually for 8 years at 12% may be calculated with the following formula: FV = $1,000 * (1 + 12%) 8
If the same $1,000 was compounded quarterly,what formula would you use to calculate the FV?

• A) FV = $1,000 * (1 + 3%)8
• B) FV = $1,000 * (1 + 12%)32
• C) FV = $1,000 * (1 + 3%)32
• D) FV = $1,000 * (1 + 12%)2

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Definitions:

No Par Value

Shares issued without a nominal or stated value per share, with the market price determined by demand.

Secretary of Commerce

The head of the U.S. Department of Commerce, responsible for promoting American businesses and trade.

Incorporation

The process of legally declaring a corporate entity as separate from its owners, providing limited liability, tax advantages, and other benefits.

S-Corporation

A type of corporation in the United States that elects to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.