If earned interest is not withdrawn on a 30 month 12,000 CD?

Question

with an interest rate of 6.75% and effective yield of 6.98%, when the cd matures it will be worth
a. $14,094.00
b. $14,212,97
c. $14,025.00
d. none of these

Answer 1

Answer is D, none of those, though C is pretty close if you transpose a couple of digits.

You left out that the interest is compounded daily, but I figured it out based on your effective yield.

Here's the formula
= principal * (1 + int rate/period)^(number of periods)

=12000*(1+0.0675/365)^(365*30/12)

=14,205.67

Hope that helps!

Answer 2

D