Question

g cd Marco deposited today $100,000 in a three-year, 12% Certificate of Deposit (CD) that compounds quarterly. What is the maturity value of the CD

Answer 1

The maturity value of the CD is $142,576

Step-by-step explanation:

The computation of the maturity value of the CD is shown below:

As we know that

Maturity Value = Deposit made × (1 + rate of interest)^number of years

where

r = 12% ÷ 4 = 3%

And,

n = 3 × 4 = 12

Now

The Maturity Value of a Cash Deposit is

= $100,000 × (1.03)^12

= $142,576

hence, the maturity value of the CD is $142,576