SOLUTION: On​ Melissa's 6th​ birthday, she gets a ​$5000 CD that earns 4​% ​interest, compounded quarterly. If the CD matures on her 13th ​birthday, how much money will be​ ava

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Question 1170113: On​ Melissa's 6th​ birthday, she gets a ​$5000 CD that earns 4​% ​interest, compounded quarterly. If the CD matures on her 13th ​birthday, how much money will be​ available?

Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


Original value: $5000
annual interest rate: 4%
quarterly interest rate: (1/4) of 4% = 1% = 0.01
quarterly growth factor: 1+0.01 = 1.01
number of quarters in 7 years: 7*4=28
growth factor over 7 years (28 quarters): 1.01^28

value after 7 years: original value, multiplied by the growth factor:

5000%281.01%5E28%29

Use a calculator....