Marcus receives an inheritance of ​$3,000. He decides to invest this money in a 13​-year certificate of deposit​ (CD) that pays 5.0​% interest compounded monthly. How much money will Marcus receive when he redeems the CD at the end of the 13 ​years?Marcus will recieve $___Round to the nearest cent

Question
Asked Nov 8, 2019

Marcus receives an inheritance of ​$3,000. He decides to invest this money in a
13​-year certificate of deposit​ (CD) that pays 5.0​% interest compounded monthly. How much money will Marcus receive when he redeems the CD at the end of the 13 ​years?

Marcus will recieve $___

Round to the nearest cent

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Expert Answer

Step 1

Recall the following fact.

nt
Compound Amount P1
where P is the Principal amount
i is the annual interest rate
n is the number of years
t is the number of times compounded per year
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nt Compound Amount P1 where P is the Principal amount i is the annual interest rate n is the number of years t is the number of times compounded per year

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Step 2

Substitute the given values and compute the co...

P $3,000, n 13, t =12 and i =5%
nt
=P1
Compound Amount
13x12
0.05
=3000 1
12
156
12.05
= 3000
12
$5,738.87
help_outline

Image Transcriptionclose

P $3,000, n 13, t =12 and i =5% nt =P1 Compound Amount 13x12 0.05 =3000 1 12 156 12.05 = 3000 12 $5,738.87

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