Question

JG Asset Services is recommending that you invest $1,500 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures?a. $1,781.53b. $1,870.61c. $1,964.14d. $2,062.34e. $2,165.46

Answer 1

Answer:

So after 5 year total amount will be $1781.529

So option (a) is correct option

Explanation:

We have given that JG Asset is recommending that you invest $1500 for 5 years at rate of 3.5%

So principle amount P = $1500

Rate of interest r = 3.5 %

Time n = 5 years

We know that when total amount is given by

$A=P(1+\frac{5.5}{100})^n$, here r is rate of interest and n is time period

So amount after 5 years will be

$A=1500(1+\frac{3.5}{100})^5= 1781.52$

So after 5 year total amount will be $1781.529

So option (a) is correct option