Question

Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 6.5% interest, compounded annually. How much will you have when the CD matures?a. $3,754.27b. $3,941.99c. $4,139.09d. $4,346.04e. $4,563.34

Answer 1

Answer:

a. $3,754.27

Explanation:

$Principal \times (1+ r)^{time} = Amount$

The principal will be how much you have investment

rate is the coumpound rate

time is the years of your investment

We post into the formula the givens and calculate:

$2,000 \times (1.065)^{10} = Amount$

Amount = 3,754.27