Question

To help pay for a class trip at the end of their senior​ year, the sophomore class at a high school invests ​$1700 from​ fundraisers in a 30​-month CD paying 4.5​% interest compounded monthly. Determine the amount the class will receive when it crashes in the CD after 30 months.

Answer 1

Answer:

$1,902

Explanation:

To calculate how much the class will receive we have to use the compound interest formula:

total amount = principal (1 + r)ⁿ

where:

  principal = $1,700

  r = 4.5% / 12 = 0.375% = 0.00375

  n = 30 months

total amount = $1,700 (1 + 0.00375)³⁰ = $1,700 (1.118836) = $1,902