Dixie Bank offers a certificate of deposit with an option to select your own investment period....
Dixie Bank offers a certificate of deposit with an option to select your own investment period. Jonathan has $7,000 for his CD investment. If the bank is offering a 6% interest rate, compounded annually, how much will the CD be worth at maturity if Jonathan picks a two year investment period? a five-year investment period? a eight-year investment period?
a fifteen year year investment period?
a. How much will the $7,000 CD investment at 6% interest rate be worth at maturity if Jonathan picks a 2-year investment period?
(Round to the nearest cent.)
Homework Answers
a.
Future Value after 2 year investment period = 7,000(1.06)2
Future Value after 2 year investment period = $7,865.20
b.
Future Value after 5 year investment period = 7,000(1.06)5
Future Value after 5 year investment period = $9,367.58
c.
Future Value after 8 year investment period = 7,000(1.06)8
Future Value after 8 year investment period = $11,156.94
d.
Future Value after 15 year investment period = 7,000(1.06)15
Future Value after 15 year investment period = $16,775.91
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