Question

1 poir

Question 1. Jessica has $1,625.00 to purchase a five-year Certificate of
Deposit (CD). In the chart, there are CD rates frombankrate.com. What
would the account ending balance be at Synchrony Bank if it is
compounded quarterly? *
Use the Compound Interest Formula to calculate the ending balance. A = P(1 + 5)nt
Nationwide
Bank
Nationwide
2.01%
No
Synchrony Bank
all synchrony
1.95%

Answer 1

9514 1404 393

Answer:

$1790.99

Explanation:

Given:

$1625 is invested at an annual rate of 1.95% compounded quarterly for 5 years

Find:

the ending balance

Solution:

The compound interest formula applies.

FV = P(1 +r/n)^(nt) . . . Principal P at rate r for t years, compounded n per year

FV = $1625(1 +0.0195/4)^(4·5) = $1625(1.004875^20) ≈ $1790.99

The account ending balance would be $1790.99.