What is the future value of 1000 in a bank for 5 years at 4 percent compounded bimonthly?

Answer 1

First, I have to decide whether 'bimonthly' means 'every two months' or 'twice a month'.

Unfortunately it means both in popular usage!

In the publishing industry, though, it's used fairly consistently to mean 'every two months',

so that a bimonthly magazine is generally one that's issued every two months. The same

ambiguity affects biweekly and biyearly.

In the future, especially where your money is concerned, if you want to be absolutely

clear, it's best to use a phrase such as 'twice a week' or 'every two years'.

From your question, I'll take it to mean 'every two months', so that your interest is

compounded 6 times a year, and 30 times in 5 years.

Future value = $1,000 x (1 + 0.04/6)30 = $1,220.59