Question

Question

Tara deposits $5,000 in a certificate of deposit. The annual interest rate is 7%, and the interest will be compounded
quarterly. How much will the certificate be worth in 10 years? Round your answer to two decimal places.

Answer 1

$10048.31

Explanation:

Answer 2

Explanation:

The formula for this is

`A(t) = P(1+(r)/(n))^(nt)` where A(t) is the amount at the end of this whole mess, P is the initial investment, r is the interest rate as a decimal, n is the number of times the compounding is done per year, and t is the number of years. Filling in accordingly:

`A(t)=5000(1+(.07)/(4))^((4)(10))` which simplifies a bit to

`A(t)=5000(1+.0175)^{40` and a bit more to

`A(t)=5000(1.0175)^(40)` Take care of the exponent first to get

A(t) = 5000(2.001597343) and multiply through to get

A(t) = 10,007.99