Final answer:
The maturity value of the 5-year term deposit at a 6.9% interest rate compounded annually is $2969.14, and the total interest earned is $865.31.
Step-by-step explanation:
To calculate the maturity value of a term deposit with compound interest, we use the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial sum of money), r is the annual interest rate (in decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
In this case, for a 5-year term deposit of $2103.83 at 6.9% interest compounded annually, our formula becomes:
A = 2103.83(1 + 0.069/1)^(1*5)
By calculating, we get:
A = 2103.83(1 + 0.069)^5
A = 2103.83(1.069)^5
A = 2103.83 * 1.41158
A = 2969.14
Therefore, the maturity value is $2969.14.
To calculate the total interest earned, we subtract the principal from the maturity value:
Interest Earned = Maturity Value - Principal
Interest Earned = 2969.14 - 2103.83
Interest Earned = $865.31