Question

On​ Melissa's 6th​ birthday, she gets a ​$5000 CD that earns ​3% ​interest, compounded . If the CD matures on her 10th ​birthday, how much money will be​ available?

Answer 1

$5,632.45

Explanation:

Assuming it is compounded semiannually, A(t) = P(1 + (r/n))^(n*t)

A(4) = 5000*(1 + (0.03/2))^(2*4)

A(4) = 5,000*(1.015)^8

A(4) = 5,000*1.12649

A(4) = $5,632.45