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Jill bought a cd for $1000 that earns 4.2% apr and is compounded monthly. The cd matures in 2 years. How much will this cd be worth at maturity?
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Jill bought a cd for $1000 that earns 4.2% apr and is compounded monthly. The cd matures in 2 years. How much will this cd be worth at maturity?
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May 18, 2019
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jill bought a cd for $1000 that earns 4.2% apr and is compounded monthly. The cd matures in 2 years. How much will this cd be worth at maturity?
Mathematics
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Callum Reid
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The value at maturity will be given by compound formula given by:
FV=P(1+r/100*n)^n*t
where:
FV=future value=value at maturity
p=principle
r=rate
n=number of terms
t=time
Thus plugging our values in the formula we get:
P=$1000; r=4.2, t=2 years, n=12 terms
FV=1000(1+4.2/12*100)^2*12
FV=1000(1+0.0035)^24
FV=1087.469396
Thus the value at maturity will be $1087.469396
Ceili
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May 20, 2019
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Ceili
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A = P(1+r/12)^12t, where A = amount after two years, P = Initial amount = $1000, r =apr = 4.2% = 0.042, t = period = 2 years
Then,
A = 1000 (1+0.042/12)^12*2 = $1087.47
MattDavis
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May 23, 2019
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MattDavis
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