Question

Lori buys a $1500 certificate of deposit (CD) that earns 6% interest that compounds monthly. How much will the CD be worth in:

5 years?

Answer 1

$1500

6% interest

Explanation:

use the formula...

P(1+(r/100))^n

where P=initial amount

r=interest rate

t=time period elapsed

so ... for 5 years we get

$1500(1+(6/100))^5 = $1500(1.06)^5 = 2007.3383664

for 10 years

1500(1.06)^10 = 2686.271544814228043264

468 months = 39 years

1500(1.06)^39=14555.261231781943250017719606544