Question

Antuan deposited $2590 into a 3 year CD at an interest rate of 2.3% compounded quarterly.

What is the ending balance after the three years? Show your work.

Answer 1

$2774.47

Explanation:

To find how much Antuan's ending balance will be, we can use the formula for compound interest.

`A=P(1+(r)/(n))^(nt)`

The values that we currently have are:

P = 2590

t = 3

n = 4 quarterly

r = 2.3% or 0.023

Now we can plug these values into our formula.

`A=P(1+(r)/(n))^(nt)`

`A=2590(1+(0.023)/(4))^(4(3))`

`A=2590(1+0.00575)^(12)`

`A=2590(1.00575)^(12)`

`A=2774.47`

So Antuan's ending balance will be $2774.47.