At maturity, a deposit of $6,000 in a certificate of deposit (CD)for 10 years at 3% will be worth: (Select the closest answer.)

Question

Quizplus · Accepted Answer

The future value of a deposit in a certificate of deposit (CD) can be calculated using the formula for compound interest: $FV = P(1 + r)^n$, where $FV$ is the future value, $P$ is the principal amount ($6,000), $r$ is the annual interest rate (3% or 0.03), and $n$ is the number of years (10). Plugging in the values: $FV = 6000(1 + 0.03)^{10} = 6000(1.03)^{10} ≈ $8,064$.

At Maturity, a Deposit of $6,000 in a Certificate of Deposit