Question

suppose that$22,700 is invested in a certificate of deposit for 1 year at 10.9% annual interest to be compounded semi-annually. How much interest will this investment earn? Round your answer to the nearest cent, if necessary. Note: 365 days in a year and 30 days in a month

Answer 1

Answer:

$2541.72

Step-by-step explanation:

$22700 is invested in a certificate of deposit for 1 year at 10.9% annual interest to be compounded semi-annually.

So, the semi-annual interest is $\frac{10.9}{2} =5.45$%

If the invested amount is P and r% interest and compounded n times then the interest will become $P[1+\frac{r}{100} ]^{n} -P$,

Therefore, in this case, $22700[1+\frac{5.45}{100} ]^{2}-22700$

= 2541.72

So, the interest becomes $2541.72. (Answer)