Question

Kira received a $1600 bonus. She decided to invest it in a 3-year certificate of deposit (CD) with an annual interest rate of 1.36% compounded annually.
Answer the questions below. Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.

1.) assuming no withdrawals are made, how much money is in Kira's account after
3 years?

2.) How much interest is earned on Kira's investment after 3 years?

Answer 1

Answer:

1. $1666.17

2. $666.17

Step-by-step explanation:

The bonus of $1600 that Kira gets is invested for 3 years at an annual interest of 1.36% compounded annually.

Therefore, after 3 years Kira will have in her account  

$1600(1+\frac{1.36}{100} )^{3} =1600(1.0136)^{3}= 1666.17$ dollars (Answer)

Therefore, the amount of interest earned by Kira's investment after 3 years will be  

$( 1666.17 - 1600 ) = $666.17 ( Answer )