Answer: the compound amount when the second CD matures is $14889.9
Step-by-step explanation:
We would apply the formula for determining compound interest which is expressed as
A = P(1+r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
P = 6900
r = 2.2% = 2.2/100 = 0.022
n = 1 because it was compounded once in a year.
t = 2 years
Therefore,.
A = 6900(1 + 0.022/1)^1 × 2
A = 6900(1.022)^2
A = 7206.9396
The amount reinvested in the second account is
7206.9396 + 6900 = $14106.9396
r = 2.7% = 0.027
t = 2 years
n = 365 because it was compounded daily . Therefore,
A = 14106.9396(1 + 0.027/365)^2 × 365
A = 14106.9396(1.000074)^730
A = 14106.9396 × 1.0555
A= $14889.9
