A certificate of deposit (CD) is similar to a savings account, but deposits are generally held to maturity. They usually offer higher rates than savings accounts because they "tie up" money for a period of time and often require a minimum deposit. A 3-year CD at a certain bank has a nominal rate of 3.264%, and an effective annual yield of 3.300%. If $500 is deposited with this bank, how much will be in the account at the end of the 3 years?

A certificate of deposit (CD) is similar to a savings account, but deposits are generally held to maturity. They usually offer higher rates than savings accounts because they "tie up" money for a period of time and often require a minimum deposit. A 3-year CD at a certain bank has a nominal rate of 3.264%, and an effective annual yield of 3.300%. If $500 is deposited with this bank, how much will be in the account at the end of the 3 years?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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