Question

Suppose you buy a CD for $300 that earns 3% APR and is compounded quarterly. The CD matures in 3 years. How much will this CD be worth at maturity?

A. $328.14
B. $309.12
C. $309.10
D. $303.01
help?,

Answer 1

Amount spent at start C = $300 Rate = 3% = 0.03 Number of periods = 3 years Future Value at the maturity FV = 300 x (1 + 0.03) ^3= 300 x 1.0927 = 328 The correct answer would be 328.14