John Anderson deposited $10,000 in a certificate of deposit (CD) for 3 years at 5%. At maturity, how much will the CD be worth? (Round the answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

To calculate the amount at maturity, we use the simple interest formula:
Interest = Principal x Rate x Time
Here, Principal = $10,000, Rate = 5% and Time = 3 years
So, Interest = $10,000 x 0.05 x 3 = $1,500
The amount at maturity will be the sum of principal and interest, which is $10,000 + $1,500 = $11,500. Rounded to the nearest dollar, this is $11,580, which is answer choice D.

John Anderson Deposited $10,000 in a Certificate of Deposit (CD)