Question

Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has ​$9 comma 5009,500 for his CD investment. If the bank is offering a 4.54.5​% interest​ rate, compounded​ annually, how much will the CD be worth at maturity if Jonathan picks a three​-year investment​ period?

Answer 1

Amount 10,841.08

Step-by-step explanation:

To know the value of the certificate of deposit in three-years we will use the compounding interest formula:

`Principal \: (1+ r)^(time) = Amount`

Principal $9,500.00

time = 3 years

rate = 4.5% = 4.5/100 = 0.045

`9500 \: (1+ 0.045)^(3) = Amount`

Amount 10,841.08

The CD investment of Jonathan will return 10,841.08 in 3 years at the Dixie Bank rate.