Question

What is the balance after twoyears on a CD with an initialinvestment of $1,200.00 and a2.6% interest rate?

Answer 1

Given:

Initial investment, P = $1,200.00.

Interest rate, r =2.6 %.

The period of time, t =2 years.

Required:

We need to find the balance on a CD.

Step-by-step explanation:

A is the total that your CD will be worth at the end of the term.

Consider the formula to find CD.

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

Substitute P = 1200.00 and r = 2.6 %=0.026, and n=1 in the formula.

`A=1200(1+(0.026)/(1))^(1*2))`
`A=1263.21`

Final answer:

The balance after two years on a CD is $ 1,263.21.