Christina invested 4,200 in a certificate of deposit with an annual interest rate of 4% compounded quarterly. What is the value of the certificate of deposit after 20 years?

Solution

Christina invested 4, 200 in a certificate of deposit with an annual interest rate of 4% compounded quarterly. What is the value of the certificate of deposit after 20 years?

Solution

Amount : 9310.2

Solution steps

Translate the problem into an equation:

A = 4200 (1 + \frac{0.04}{4})^{4 \cdot 20}

4200 (1 + \frac{0.04}{4})^{4 \cdot 20} = 9310.20391 \dots

Round to the nearest hundredth:

9310.2

Amount : 9310.2

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