Tara deposits 5,000 in a certificate of deposit. The annual interest rate is 7% , and the interest will be compounded monthly. How much will the certificate be worth in 10 years?

Solution

Tara deposits 5, 000 in a certificate of deposit. The annual interest rate is 7% , and the interest will be compounded monthly. How much will the certificate be worth in 10 years?

Solution

Amount : 10048.31

Solution steps

Translate the problem into an equation:

A = 5000 (1 + \frac{0.07}{12})^{12 \cdot 10}

5000 (1 + \frac{0.07}{12})^{12 \cdot 10} = 10048.30688 \dots

Round to the nearest hundredth:

10048.31

Amount : 10048.31

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