Question

find the future value of a 160,000 certificate of deposit that pays compounded interest every six months at a rate of 4% per year. The CD has term of 5 years

Answer 1

$\bf \qquad \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\to &\ 160000\\ r=rate\to 4\%\to \frac{4}{100}\to &0.04\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{every six months, so twice} \end{array}\to &2\\ t=years\to &5 \end{cases} \\\\\\ A=160000\left(1+\frac{0.04}{2}\right)^{2\cdot 5}$