Blanche bought a 5-year cd for $7100 with an apr of 2.8%, compounded quarterly, but she wants to take all her money out 9 months
early. the early redemption fee for the cd is 3 months' interest on the original principal. help blanche determine how much money she will end up earning in interest on the cd. (5 points: part i – 1 point; part ii – 1 point; part iii – 1 point; part iv – 1 point; part v – 1 point)
The formula for getting the accumulated amount(compounded) is; A =P(1+r%)∧n Where A = Acumulated amount P = principle (deposit) r = interest rate and n = period Since the interst is compounded quartly, period = (5×4)-3 = 17
A = 7100(1+2.8/100)∧17 = 7100×1.028∧17 = 11,353.80
The money she will end up earning in interest on the cd = $11,353.80
