nick deposited $3000 in a three-year CD account that pays 4.08% interest, compounded weekly. what is the ending balance?

Question

Financial algebra

Answer 1

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

 

Where:

• A = the final amount
• P = the initial amount = $3000
• r = annual interest rate expressed as a decimal = 4.8% = 0.048
• n = number of compoundings per year = weekly = 52
• t = years = 3

 

A = ($3000)(1 + 0.048/52)^52*3

 

A = ($3000)(1.00092)¹⁵⁶

 

A = ($3000)(1.1548)

 

A = $3464.42