I need help with a business math problem. I do not know how to start

Question

Pete's Real Estate is currently valued at $68 ,000. Pete feels the value of his business will increase at a rate of 8% per year,

compounded semiannually for the next 6 years. At a local fund-raiser, a competitor offered Pete $73,000 for the business. If he sells,

Pete plans to invest the money at 4% compounded quarterly. What price should Pete ask?

Answer 1

Compound interest is interest accrued on both the original amount and the interest previously accrued. So, the yearly 8% Pete expects his value to grow "compounded semi-annually" means that half of the year, or 4% is added to the principal value at the 6 month interval. The next 4% is on the new interest added value and so on. With this information, calculate what the business will be worth in 6 years and then determine if the offer is a good one or if Pete should ask for a different price. How Pete plans to invest the money after the sale is irrelevant.