How much interest would be earned on a 10-year $117,000 Guaranteed Investment Certificate that grows at 9% compounded monthly?
A) $126,360
B) $159,982
C) $169,809
D) $276,981
E) $286,808

Question

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where P is the principal amount ($117,000), r is the annual interest rate (0.09), n is the number of times interest is compounded per year (12), and t is the number of years (10). Calculating this gives the total amount A, and the interest earned is A - P.

How Much Interest Would Be Earned on a 10-Year $117,000