Question

Deadra receives a 1600 bonus he decides to invest itt in a 5 year certificate cd with an annual rate of 1.42% compounded annually how much money after 5 years and how much interest

Answer 1

Final amount = Initial amount × (1 + interest rate)^number of years

In this case, the initial amount is 1600 , the interest rate is 1.42% (or 0.0142 in decimal), and the number of years is 5.

Final amount = 1600 × (1 + 0.0142)^5

Final amount = 1600 × 1.07281666569

Final amount ≈ 1716.50

interest amount= Final amount - Initial amount

Interest amount = 171.50 - 1600=116.5

Explanation: