Question

Question 3 2 pts Wk3Hw_FV2 Sara has $5,990 to invest in a bank certificate of deposit for 9 years. The bank is paying 12% interest per year compounded monthly. How much will Sara's investment be worth at the end of the 9 year period? (round to 2 decimal places) Use the correct formula from below to solve this problem. **(1+r)^n x+(CF/(1+r)^1)+(CF/(1+r)^2)+(CF/(1+r)^3)+(CF/(1+r)^4).... x+SQRT(1-rin) Wk3Hw_FV2

Answer 1

Answer:

The Correct formula to solve this problem is :

X * (1 + r)^ n

Where,
X = Amount Deposited = $5,990
r = Rate = 12% per year or 1% per month
n = Time = 9 years = 108 months
Future Value = Amount at the end of 9 years

Future Value = $5,990 * (1 + 0.01)^ 108
Future Value = $5,990 * 1.01^ 108
Future Value = $5,990 * 2.9289
Future Value = $17,544.11

Therefore, the investment will be worth $17,544.11 at the end of 9 years.