Suppose you have $5,000 and plan to purchase a 2-year certificate of deposit that pays 8% interest, compounded monthly. How much will you have when the CD matures?
1 câu trả lời
Đáp án: `≈$5864`
Bước giải:
To calculate the monthly compounded interest, use the formula:
`I=P(1+r/12)^{12n}`
Where
`I` is the final value.
`P` is principal.
`r` is the interest rate.
`n` is time (usually in years.)
Replace `P` with the value `$5000`, `r` with `8%`, and `n` with `2` in the formula, therefore:
`I=$5000(1+8%/12)^{12*2}`
` =$5000(151/150)^24`
` ≈$5000*1.1728`
` ≈$5864`
Hence, I will have about `$5864` when the CD matures.
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