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Cloud Strife is going to place $12,500 into a certificate of deposit (CD) at a 6% annual rate (compounded annually) with a maturity of 30 months.

Cloud Strife is going to place $12,500 into a certificate of deposit (CD) at a 6% annual rate (compounded annually) with a maturity of 30 months. How much money will Cloud receive when the CD matures?

Solutions

Expert Solution

We use the formula:  
A=P(1+r/100)^n
where   
A=future value
P=present value  
r=rate of interest
n=time period=(30/12=2.5 years]

A=12500*(1.06)^2.5

=12500*1.156817

=$14460.21(Approx)

jeff jeffy answered 2 years ago
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