A deposit of $6,000 saved in a CD for 10 years at 3% will be worth (select the closest answer)

Question

Quizplus · Accepted Answer

The formula to calculate the future value (FV) of a CD with annual compounding interest is
FV = P*(1+r)^n
Where P is the principal amount, r is the annual interest rate and n is the number of years.
Substituting the values given in the question,
FV = 6000*(1+0.03)^10
= 6000*(1.03)^10
= 6000*1.344
= $8,064
Thus, the closest answer is C) $8,040.

A Deposit of $6,000 Saved in a CD for 10