Question

Mr. and Mrs. kinkaid open a certificate of deposit account that pays 1.45% interest compounded daily. How much interest will the account earn in 5 years on their deposit of $8,500? SHOW ALL WORK FOR CREDIT.

Answer 1

After 5 years, the account will have earned $ 639.13 in interest.

Explanation:

Given that Mr. and Mrs. kinkaid open a certificate of deposit account that pays 1.45% interest compounded daily, to determine how much interest will the account earn in 5 years on their deposit of $ 8,500, the following calculation must be performed:

X = 8500 (1 + 0.0145 / 365) ^ 5x365

X = 8500 (1 + 0.0145 / 365) ^ 1825

X = 9,139.13

9,139.13 - 8,500 = 639.13

Thus, after 5 years, the account will have earned $ 639.13 in interest.