Question

Diana put $8000 in a 10-year CD

Answer 1

Th amount of money that Diana is left with is $8,430.23.

How much is Diana left with?

The first step is to determine the interest earned in the first year and the total amount that was made in the 2 years.

The formula used to determine the future value with monthly compounding is:

P(1 + r)^( n x m)

Where:

• P = present value
• r = periodic interest rate
• n = number of years
• m = frequency of compounding

Total amount made in 2 years = $8000 x ( 1 + 5% / 12)^(12 x 2) = 8839.53

Interest earned in the first year = [ $8000 x ( 1 + 5% / 12)^(12) ] - 8000 = $409.29

Amount she is left with =  8839.53 - $409.29 = $8430.23

To learn more about compounding, please check: brainly.com/question/18760477

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