Question

if Olivia opens a CD with $2,700 earning interest at 1.2% compounded quarterly what will the value of the CD be in 5 years

Answer 1

For this case we can use the compounded interest formula given by:

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

For this situation A= 2700, r = 0.012 and n = 4 and t=5 and we have:

`A=2700(1+(0.012)/(4))^(4\cdot5)=2866.701`