Ajax Company purchased a five-year certificate of deposit for their building fund in the amount of $220,000. How much should the certificate of deposit be worth at the end of five years if interest is compounded at an annual rate of 9%?
A)$857,230.
B)$142,985.
C)$319,000.
D)$338,496.FV = $220,000 x 1.53862* = $338,496 *FV of $1: n=5; i=9%

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we can calculate the final value (FV) of the certificate of deposit after five years:
FV = $220,000 x (1 + 0.09)^5
FV = $220,000 x 1.53862*
FV = $338,496
Therefore, the certificate of deposit should be worth $338,496 at the end of five years if interest is compounded at an annual rate of 9%. The correct answer is D.

Ajax Company Purchased a Five-Year Certificate of Deposit for Their