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Finance question...

Scarpozzi

Scarpozzi

Lifer
If you have a cash flow stream of $100 every year for 3 years and an interest rate of 10% compounded semi-annually, what's the future value?

I've tried plugging this into my BAII calc and don't know how to enter it in correctly. I'm used to computing the net present value and computing annuities, but not sure how to put this in without it compounding 10% 6 times....it should only compound 5% 6 times with only 3 CFs. Thanks if anyone has an idea...
 
You almost answered your own question, input 5% interest rate for 6 periods to get your answer.

The calculator has no concept of year, only number of periods to compound the interest.
 
$340.10

edit: I don't use that calculator, I could tell you how on an HP12C, although I used used excel here. =FV() function.
 
hah...don't have my calculator with me and i use 12c.

use the formula?

100(1+.1) + 100(1+.1)^2 + 100(1+.1)^3

oops...since it is semi-annual, cut the interest in half and mulitply year by 2
 
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