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

Question

Quizplus · Accepted Answer

To solve this problem, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where A is the amount at the end of the period, P is the principal (initial deposit), r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years.

In this case, P = $6,000, r = 0.03, n = 1 (compounded annually), and t = 10. Plugging in these values, we get:

A = 6000(1 + 0.03/1)^(1*10)
A = $8,063.86

The closest answer choice is C, $8,064. Therefore, the best choice is C.

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