To calculate the terminal value of the investments, we use the discrete compound interest formula: $FV = PV \times (1 + \frac{r}{n})^{n \times t}$

Investor A (Semiannual Compounding):

• Principal ($PV$) = $1000
• Rate ($r$) = 5% or 0.05
• Compounding periods per year ($n$) = 2
• Time in years ($t$) = 2 FV_A = 1000 \times (1 + \frac{0.05}{2})^{2 \times 2} = 1000 \times (1.025)^4 \approx 1000 \times 1.10381 = \`1`,103.81$

Investor B (Quarterly Compounding):

• Compounding periods per year ($n$) = 4 FV_B = 1000 \times (1 + \frac{0.05}{4})^{4 \times 2} = 1000 \times (1.0125)^8 \approx 1000 \times 1.10448 = \`1`,104.48$

Comparing the values, Investor A receives `1`,103.8 and Investor B receives \`1`,104.4.