Solve the Problem. -A Bank Offers a Certificate of Deposit That Earns 4.5

question 43

Multiple Choice

Solve the problem.
-A bank offers a certificate of deposit that earns 4.5% interest compounded continuously. How much will a $4,000 investment be worth in 10 years? Round to the nearest cent as needed.

• A) $4,200.00
• B) $4,180.00
• C) $6,273.25
• D) $5,967.30

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Definitions:

Cheques

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or the person named on it.

Lockbox System

A lockbox system is a service offered by banks to companies for the receipt of payment from customers, under which the payments are directed to a special post office box rather than to the company.

Daily Interest Rate

A method of calculating interest where the rate is applied to the principal on a daily basis.