... five years? A) $ 750 ; $ 95. 56 5- 23 Test Bank, Fundamentals of Corporate Finance, 2e B) $ 150 ; $8 45. 56 C) $ 150 ; $ 95. 56 D) $ 95. 56; $8 45. 56 Ans: A Feedback: Deposit today = PV = $2 ,50 0 Interest rate... compounding = m = 3 65 Simple interest: Simple interest per year = $10,000 (0. 057 5) = $57 5 Simple interest for years = $57 5 x = $1, 150 Future value with compound interest: mn 3 65 2 � i � � 0. 057 5 � FV2 ... interest per year = $2 ,50 0 (0.06) = $ 150 .00 Simple interest for years = $ 150 x = $ 750 .00 Future value with compound interest: FV5 = $2 ,50 0 (1 + 0.06 )5 = $3,3 45. 56 Simple interest = $ 750 Interest on interest