Trey Gorman invests $5,000 in a 1-year certificate of deposit that earns interest at an annual rate of 4% compounded monthly. The amount per $1.00 is 1.040742. How much interest will he earn at the end of one year? $203.71 $56.09 $2,142.00 $200.00
The amount of interest for $5000 investment that earns 4% per year such that 1$ is $1.040742 a the end of the year will be as follows: A=P(1+r/100)^n P=principple r=rate n=time Thus Amount at the end of the year will be: A=5000(1+4/100)^1=5200 thus interest earned will be: 5200-5000 =$200
