Q:

suppose that$22,700 is invested in a certificate of deposit for 1 year at 10.9% annual interest to be compounded semi-annually. How much interest will this investment earn? Round your answer to the nearest cent, if necessary. Note: 365 days in a year and 30 days in a month

Accepted Solution

A:
Answer:$2541.72Step-by-step explanation:$22700 is invested in a certificate of deposit for 1 year at 10.9% annual interest to be compounded semi-annually.So, the semi-annual interest is [tex]\frac{10.9}{2} =5.45[/tex]%If the invested amount is P and r% interest and compounded n times then the interest will become [tex]P[1+\frac{r}{100} ]^{n} -P[/tex],Therefore, in this case, [tex]22700[1+\frac{5.45}{100} ]^{2}-22700[/tex]= 2541.72So, the interest becomes $2541.72. (Answer)