Question

marcus receives an inheritance of $13,000. he decides to invest this money in a 10-year certificate of deposit (CD) that pays 3.0% interest compounded monthly. how much money will marcus receive when he redeems the CD at the end of 10 years?

Answer 1

Marcus will receive a total of $17,542.2 when he redeems the certificate of deposit (CD) at the end of 10 years

Explanation:

Principal(p)=$13,000

Rate(r)=3.0%

Period(n)=12 months

Time(t)=10 years

A=p(1+r/n)^nt

=13,000(1+0.03/12)^12*10

=13,000(1+0.0025)^120

=13,000(1.0025)^120

=13,000(1.3494)

=17,542.2

A=$17,542.2

Marcus will receive a total of $17,542.2 when he redeems the certificate of deposit (CD) at the end of 10 years