An investment of $31,500 was deposited in a certificate of deposit. The CD offered 4.75% compounded semi annually. The investment will remain in the CD account for 10 years. What is the maturity value of the investment?
2007-06-21 16:05:25 · 4 answers · asked by jmelee85 5 in Science & Mathematics ➔ Mathematics
31500(1+.0475/2)^20
That comes from the formula for compound interest that says A = P(1+r/n)^(nt)
where
A = ending amount of investment,
P = principal amount,
r = interest rate in decimal,
t = number of years
n = the number of times per year interest is paid
2007-06-21 16:14:33 · answer #1 · answered by Kathleen K 7 · 0⤊ 0⤋
Compounded seminannualy means 2 compoundings per year
31500(1 + .0475/2)^(2 * 10) =
$50,371.96
2007-06-21 16:08:59 · answer #2 · answered by piggy30 3 · 0⤊ 0⤋
in case you're attempting to create an "emergency" fund or are saving for a purchase order interior the close to destiny, then the CD is right. yet once you're searching for for an prolonged-term investment, taking over some possibility in substitute for greater capacity return is a greater advantageous decision.
2016-12-08 16:03:51 · answer #3 · answered by mcintire 4 · 0⤊ 0⤋
F.V. = $31,500(1.02375)^20 = $50,371.96
2007-06-21 16:11:39 · answer #4 · answered by Helmut 7 · 0⤊ 0⤋