Question

Question 17 (1 point) You have $5000 invested in a 30-day savings certificate at an interest rate of 1.00%. How much money will you have when the certificate matures? OA) $5400.11 B) $4500.11 OC) $5040.11 OD) $5004.11 E) $4.11

Answer 1

The maturity of the certificate will consist of the principal and interest amount combined. Interest is calculated on the value of principal at the rate given for the period given.

Formula for maturity value = P + P × r × n

Here the principal (p)amount of $ 5000 is given , r = 1% and n = 30 days.

Thus maturity value = $ 5000 + ( 5000 × 1% × 30/365).

Maturity value = $ 5000 + 4.11

So the amount of money when certificate matures = $ 5004.11.

Thus the correct Option is-------------D i.e 5004.11