You invest $100 today in a two-year certificate of deposit that pays a 10% annual interest rate compounded annually.At maturity,your CD will give you $120.

Name: You invest $100 today in a two-year certificate of deposit that pays a 10% annual interest rate compounded annually.At maturity,your CD will give you $120.
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Question

Quizplus · Accepted Answer

The CD will give you $121 at maturity because the interest is compounded annually, so the amount after two years is $100 * (1 + 0.10)^2 = $121.

You Invest $100 Today in a Two-Year Certificate of Deposit