Question

Suppose a bank offers a CD that earns 1% interest compounded 353 times per year. You invest $1,282 today. How much will you have (in dollars and cents) after 8 years?

Answer 1

1388 dollars 77 cents.

Explanation:

Since, the amount formula in compound interest is,

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

Where, P is the principal amount,

r is the annual rate,

n is the number of periods in a year,

t is the number of years,

Given,

P = $ 1,282,

r = 1 % = 0.01,

n = 353,

t = 8 years,

Hence, the amount after 8 years would be,

`A=1282(1+(0.01)/(353))^(2824)`

`=\$ 1388.77244711`

`\approx \$ 1388.77`

= 1388 dollars 77 cents.