Question

Suppose you buy a CD for $500 that earns 2.5% APR and is compounded quarterly. The CD matures in 3 years. How much will the CD be worth at maturity?

Answer 1

The formula is
A=p (1+r/k)^kt
A future value?
P present value 500
R interest rate 0.025
K compounded quarterly 4
T time 3years
A=500×(1+0.025÷4)^(4×3)
A=538.82