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Audrey deposited $10,000 into a 3-year certificate of deposit that earned 10% annual interest, compounded annually. Audrey made no additional deposits to or withdrawals from the certificate of deposit. What was the value of the certificate of deposit at the end of the 3-year period?

A. $13,000 B. $13,300 C. $13,310 D. $13,401

Respuesta :

sqdancefan

Answer:

  C.  $13,310

Step-by-step explanation:

You want to know the value of an investment of $10,000 that earns 10% interest compounded annually for 3 years.

Compound interest

The value of an account earning interest at rate r compounded annually for t years is ..

  A = P(1 +r)^t

where P is the initial investment.

  A = 10,000(1 +0.10)^3 = 13,310

The value of the CD at the end of 3 years is $13,310.

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