Question

For her 1st birthday, Ruth's grandparents invested $800 in an 18-year certificate for her that pays 8% compounded annually. How much will the certificate be worth on Ruth's 19th birthday? (Round your answer to the nearest cent.)

Answer 1

Explanation:

On Ruth's 19th birthday the certificate will be worth $ 5,559.92.

Given that for her 1st birthday, Ruth's grandparents invested $ 1000 in an 18-year certificate for her that pays 10% compounded annually, to determine how much will the certificate be worth on Ruth's 19th birthday the following calculation must be performed:

1000 x (1 + 0.1) ^ 18 = X

1000 x 1.1 ^ 18 = X

1000 x 5.55991 = X

5,559.91 = X