Answer:
The certificate will be worth $5,559.92 on Ruth's 19th birthday.
Step-by-step explanation:
The compound interest formula is given by:
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.
In this problem, we have that:
[tex]P = 1000, n = 1, r = 0.1, t = 18[/tex]
So
[tex]A = 1000(1 + \frac{0.1}{1})^{1*18}[/tex]
[tex]A = 5559.92[/tex]
The certificate will be worth $5,559.92 on Ruth's 19th birthday.
On Ruth's 19th birthday the certificate will be worth $ 5,559.91.
Given that for her 1st birthday, Ruth's grandparents invested $ 1000 in an 18-year certificate for her that pays 10% compounded annually, to determine how much will the certificate be worth on Ruth's 19th birthday the following calculation must be performed:
Therefore, on Ruth's 19th birthday the certificate will be worth $ 5,559.91.
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