Question

$1400 from​ fund-raisers in a 18​-month CD paying 3.7​%

Answer 1

Answer:

The junior class will receive US$ 1,479.77 when it cashes in the Certificate of Deposit.

Step-by-step explanation:

1. Let's review the data given to us for answering the question:

Amount invested in the Certificate of Deposit = US$ 1,400

Duration of the CD = 18 months

Interest rate = 3.7% compounded monthly

2. Let's find the future value of the Certificate of Deposit after 18 months, using the following formula:

FV = PV * (1 + r) ⁿ

PV = Amount invested = US$ 1,400

number of periods (n) = 18

rate (r) = 3.7% = 0.037 annually or 0.003083 monthly

Replacing with the real values, we have:

FV = 1,400 * (1 + 0.003083) ¹⁸

FV = 1,400 * (1.003083) ¹⁸

FV = 1,400 * 1.056978

FV = US$ 1,479.77 (Rounding to the nearest cent)

The junior class will receive US$ 1,479.77 when it cashes in the Certificate of Deposit.