In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical...

Question

In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical engineering graduate decided to sell some of his “toys." At time t = 0, he sold his chopper motorcycle for $18,000.  Six months later, he sold his Baja pre-runner SUV for $26,000. At the end of year 1, he got $42,000 for his pro-light race truck. If he invested all of the money in a high-risk commodity hedge fund that earned 24% per year, compounded semiannually, how much did he have in the account at the end of 2 years?

Numeric Response

Komalavalli · Accepted Answer

Compounding semiannual
CI=P (1+i)n*2
P = $42,000
Year, n= 2
Per year Interest rate, i =24%
CI = 42000(1+24/200)4
CI = 42000(1+0.12)4
CI = 42000(1.24)4
CI = 99297 appx
At the end of 2 years the total amount in his bank is $99297
Compounding semiannual
 
CI
=P
 
(
1+i)
n*2
 
P = $42,

In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical engineering graduate decided to sell some of his “toys." At time t = 0, he sold his chopper...

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