Answer:
D. $142,576
Explanation:
Certificates of deposit are financial products that pay a guaranteed rate of interest
Compared with simple interest, compound interest grows your money faster, but it also makes calculating your return a little more challenging. Here’s the formula to calculate the value of an investment that pays compound interest:
A = P(1+r/n)^(nt)
Where A is the total that the CD will be worth at the end of the term, including the amount put in.
P is the principal, or the amount deposited
R is the rate, or annual interest rate, expressed as a decimal.
n is the number of times that interest in compounded every year.
t is time, or the number of years until the maturity date.
P = $100000
R = 12% = 0.12
n = Quarterly = 4
t = 3
So, A = P(1 + r/n)^(nt) becomes
A = 100000 * (1 + 0.12/4) ^ (4 * 3)
A = 100000 * (1 + 0.03)^12
A = 100000 * 1.03^12
A = 100000 * 1.425760886846178945447841
A = 142576.0886846178945447841
A = $142576----------Approximated
