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Blanche bought a 5-year cd for $7100 with an apr of 2.8%, compounded quarterly, but she wants to take all her money out 9 months early. the early redemption fee for the cd is 3 months' interest on the original principal. help blanche determine how much money she will end up earning in interest on the cd. (5 points: part i – 1 point; part ii – 1 point; part iii – 1 point; part iv – 1 point; part v – 1 point)

Respuesta :

smmwaite
The formula for getting the accumulated amount(compounded) is;
A =P(1+r%)∧n
Where A = Acumulated amount 
            P = principle (deposit)
            r = interest rate and
            n = period
Since the interst is compounded quartly, 
period = (5×4)-3 = 17

A = 7100(1+2.8/100)∧17
   = 7100×1.028∧17
   = 11,353.80

The money she will end up earning in interest on the cd = $11,353.80

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