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2 votes
Colton bought a CD for $760 that earns a 3.8% APR and is compounded monthly. The CD matures in 3 years. How much will this CD be worth at maturity

2 Answers

5 votes

Answer:

$851.62

Explanation:

User Ari Ronen
by
4.9k points
4 votes

Answer:

$851.62

Explanation:

The value multiplier wll be ...

(1 +r/n)^(nt)

where r is the annual interest rate (3.8%), n is the number of compoundings per year (12), and t is the number of years (3). Filling in these numbers, we see the ending value will be ...

A = $760(1 +.038/12)^(12ยท3) = $760(1.0031667^36) = $851.62

User Hong Duan
by
5.3k points