Question

Suppose a bank offers a CD that earns 1% interest compounded 353 times per year. You invest $1,282 today. How much will you have (in dollars and cents) after 8 years?

Answer 1

Answer:

1388 dollars 77 cents.

Step-by-step explanation:

Since, the amount formula in compound interest is,

$A=P(1+\frac{r}{n})^{nt}$

Where, P is the principal amount,

r is the annual rate,

n is the number of periods in a year,

t is the number of years,

Given,

P = $ 1,282,

r = 1 % = 0.01,

n = 353,

t = 8 years,

Hence, the amount after 8 years would be,

$A=1282(1+\frac{0.01}{353})^{2824}$

$=\ 1388.77244711$

$\approx \ 1388.77$

= 1388 dollars 77 cents.