ANNASTASIA J.

asked • 08/01/19

Compound Interest

Michael wishes to give his son a savings bond that will mature in 8 years. He would like the value of the savings bond to be $5,000 at maturity. If he can invest in a bond that has an annual interest rate of 4% compounded monthly, which of the following is the best approximation of the amount he should invest?


A $3,200

B $3,350

C $3,500

D $3,650


Please show your work, Im studying for the clep exam and am having trouble grasping interest word problems. Thanks!

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