Question

Moe puts $1500 in a bank certificate that pays an annual rate of 4.5% compounded annually. No withdrawals or deposits are made. How much will the certificate be worth (to the nearest dollar) at the end of 7 years?

Answer 1

FV= $2,041.29

Explanation:

Giving the following information:

Initial investment (PV)= $1,500

Number of periods (n)= 7 years

Interest rate (i)= 4.5% = 0.045

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

FV= 1,500*(1.045^7)

FV= $2,041.29