Question

Question content area left Part 1 On​ Melissa's 6th​ birthday, she gets a ​$3000 CD that earns 5​% ​interest, compounded semiannually. If the CD matures on her 11th ​birthday, how much money will be​ available?

Answer 1

The value of the CD at the end of the five years is approximately $1104.08.

Step-by-step explanation:

To calculate the value of the CD at the end of the five years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A is the final amount
P is the principal amount (initial deposit)
r is the annual interest rate (as a decimal)
n is the number of times interest is compounded per year
t is the number of years

In this case, P = $1000, r = 2% (or 0.02), n = 1 (compounded annually), and t = 5.

Plugging these values into the formula, we get:

A = 1000(1 + 0.02/1)^(1*5)

Simplifying, we have:

A = 1000(1.02)^5

Calculating, we find that the value of the CD at the end of the five years is approximately $1104.08.