Jon went to his local bank and deposited money in a certificate of deposit, or CD for short. A CD is a type of savings account that does not allow withdrawals until a set amount of time has passed.

Question

Jon went to his local bank and deposited money in a certificate of deposit, or CD for short. A CD is a type of savings account that does not allow withdrawals until a set amount of time has passed.

The CD that Jon opened earns interest that compounds annually at a rate of 1.2%. If you know the CD's value is equal to B after 2 years, what will the CD's value be when it matures in 5 years?
1.0123 • B
B + 2•1.012
1.012' • B
1.012' • B
В + 3• 1.012
В + 7• 1.012

Answer 1

I apologize for the incorrect response. The correct answer is 1.012³ • B. Since the interest is compounded annually, we need to multiply the initial value B by the interest rate (1.2%) raised to the power of the number of years (5 years).

Answer 2

Jon went to his local bank and deposited money in a certificate of deposit, or CD for short. A CD is a type of savings account that does not allow withdrawals until a set amount of time has passed.

incorrect

I apologize for the incorrect response. The correct answer is 1.012³ • B. Since the interest is compounded annually, we need to multiply the initial value B by the interest rate (1.2%) raised to the power of the number of years (5 years).

The correct answer is В + 7• 1.012.