Suppose you deposit $1000 in a CD paying 5% interest, compounded monthly. How much will you have in the account after 10 years? Show your so

Question

Suppose you deposit $1000 in a CD paying 5% interest, compounded monthly. How much will you have in the account after 10 years? Show your solutions

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RobertKer 4 years 2021-08-01T05:18:47+00:00 1 Answers 8 views 0

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    2021-08-01T05:20:29+00:00

    Answer:

    A = $1647.01

    General Formulas and Concepts:

    Pre-Algebra

    • Order of Operations: BPEMDAS

    Algebra I

    Compounded Interest Rate Formula: A=P(1+\frac{r}{n} )^{nt}

    • A is final amount
    • P is principle amount
    • r is rate
    • n is compounded terms
    • t is time (in years)

    Step-by-step explanation:

    Step 1: Define variables

    P = 1000

    r = 5% = 0.05

    n = 12

    t = 10

    Step 2: Solve

    1. Substitute:                    A=1000(1+\frac{0.05}{12} )^{12(10)}
    2. Divide:                          A=1000(1+0.004167 )^{12(10)}
    3. Add:                              A=1000(1.004167 )^{12(10)}
    4. Multiply:                        A=1000(1.004167 )^{120}
    5. Exponent:                     A=1000(1.64701)
    6. Multiply:                        A=1647.01

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