Donna opens a certificate of deposit (CD) with $2,000. The bank offers a 3% interest rate. If the account compounds quarterly, which of the following equations represents the future value of the account, after 1 year?
sorry would of took for ever to write them they are a no copy and paste
Then how are we to tell you which equation is correct?
To find the future value of Donna's CD after a year, we can use the formula for compound interest.
The formula for compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the account
P = the initial principal amount (the amount of money Donna deposited)
r = the interest rate (expressed as a decimal)
n = the number of times interest is compounded per year
t = the number of years the money is invested
In this case, Donna deposited $2,000, the interest rate is 3% (0.03 as a decimal), the account compounds quarterly (n=4), and she is investing for 1 year (t=1).
Plugging in the values into the formula, we get:
A = 2000(1 + 0.03/4)^(4*1)
Simplifying further, we have:
A = 2000(1 + 0.0075)^4
A = 2000(1.0075)^4
Calculating the power:
A = 2000(1.03016875)
Finally, we can multiply:
A ≈ 2060.34
Therefore, the equation that represents the future value of the account, after 1 year, is:
A = $2,060.34