Answer:
After 2 years with an annual interest rate of 1.16% compounded monthly, Jenny will have approximately $2,460.96 in her certificate of deposit.
Explanation:
To calculate how much money Jenny will have in her certificate of deposit (CD) after 2 years with an annual interest rate of 1.16% compounded monthly, you can use the formula for compound interest:
\[A = P \left(1 + \frac{r}{n}\right)^{nt}\]
Where:
- A is the future value of the investment/CD.
- P is the principal amount (initial investment), which is $1900 in this case.
- r is the annual interest rate (in decimal form), which is 1.16% or 0.0116.
- n is the number of times the interest is compounded per year, which is 12 for monthly compounding.
- t is the number of years the money is invested, which is 2 years.
Plug these values into the formula:
\[A = 1900 \left(1 + \frac{0.0116}{12}\right)^{12 \cdot 2}\]
Now, calculate the future value:
\[A = 1900 \left(1 + \frac{0.0116}{12}\right)^{24}\]
\[A ≈ 1900 \cdot 1.023611^{24}\]
\[A ≈ 1900 \cdot 1.295767\]
\[A ≈ 2460.957\]
So, after 2 years with an annual interest rate of 1.16% compounded monthly, Jenny will have approximately $2,460.96 in her certificate of deposit.