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JG Asset Services is recommending that you invest $1,000 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures?

(A) $1,175.09
(B) $1,181.39
(C) $1,187.69
(D) $1,168.79
(E) $1,162.49

Respuesta :

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Answer:

Earnings at the maturity:  (C) $1,187.69

Explanation:

Future value at the end of the period = Present Value x (1 + Interest Rate) ∧ Number of compounding periods

Future Value at the end of the period = $1,000 x (1 + 3.5% interest rate) ∧ 5 years = $1,187.69

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