# FFN20303: A deposit of \$500 (PV) made five years ago is worth \$705.30 today (FV). The deposit pays interest semi-annually: Money and Capital Market Assignment, MSU, Malaysia

 University Management & Science University (MSU) Subject FFN20303 Money and Capital Market Assignment
1. A deposit of \$500 (PV) made five years ago is worth \$705.30 today (FV). The deposit pays interest semi-annually. What is the interest rate?

Note: If you press √ means that the reciprocal of power 2 (^2). In this           calculation, it refers to power 10@ ^ 10, therefore 10√

From the calculator, you press 10 then SHIFT then ^..10 x√ 1.4106

FV = PV (1 + r) t               – annually

FV = PV (1 + r/2) tx2            – semiannually

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