Chapter 10: Q. 118 (page 1020)

Nazerhy deposits $$ 8000$ in a certificate of deposit. The annual interest rate is $6 %$ and the interest will be compounded quarterly. How much will the certificate be worth in $10$ years?

Short Answer

Expert verified

The worth of certificate after $10$ years when compounded quarterly is, $$ 14512.15$ .

Step by step solution

Step 1 The formula for the compounded n times in a year is,

$A = P {(1 + \frac{r}{n})}^{n t}$

where $A$ is the new balance.

$P$ is the principal.

$n$ is the number of times in a year.

$t$ is the number of years.

Step 2 Substitute P=8000,r=0.06,t=10,n=4 in the formula.

$A = 8000 {(1 + \frac{0.06}{4})}^{4.10} = 8000 {(1 + 0.015)}^{40} = 8000 {(1.015)}^{40} \approx 14512.15$

The required amount is, $$ 14512.15$ .

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Nazerhy deposits $$ 8000$ in a certificate of deposit. The annual interest rate is $6 %$ and the interest will be compounded quarterly. How much will the certificate be worth in $10$ years?

Short Answer

Step by step solution

Step 1 The formula for the compounded n times in a year is,

Step 2 Substitute P=8000,r=0.06,t=10,n=4 in the formula.

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Nazerhy deposits $8000in a certificate of deposit. The annual interest rate is 6%and the interest will be compounded quarterly. How much will the certificate be worth in 10years?

Short Answer

Step by step solution

Step 1 The formula for the compounded n times in a year is,

Step 2 Substitute P=8000,r=0.06,t=10,n=4 in the formula.

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Math Textbooks

Geometry

Calculus

Theoretical and Mathematical Physics

Applied Mathematics

Mechanics Maths

Probability and Statistics

Study anywhere. Anytime. Across all devices.

Nazerhy deposits $$ 8000$ in a certificate of deposit. The annual interest rate is $6 %$ and the interest will be compounded quarterly. How much will the certificate be worth in $10$ years?