The following certificate of deposit (CD) was released from a particular bank. Find the compound amount and theamount of interest earned by the following deposit.$2500 at 5% compounded daily for 8 years.What is the compound amount?(Round to the nearest cent.)What is the interest earned?(Round to the nearest cent.)

Answered: The following certificate of deposit…

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Question

The following certificate of deposit (CD) was released from a particular bank. Find the compound amount and the
amount of interest earned by the following deposit.
$2500 at 5% compounded daily for 8 years.
What is the compound amount?
(Round to the nearest cent.)
What is the interest earned?
(Round to the nearest cent.)

Expert Solution

Step 1

$g i v e n i n i t i a l a m o u n t i s $ 2500 r a t e = 5 % c o m p o u n d d a i l y f o r 8 y e a r s f o r m u l a f o r c o m p o u n d d a i l y i s A = P {(1 + \frac{r}{n})}^{n t} A i s f u t u r e v a l u e P i s i n i t i a l a m o u n t r i s r a t e n = 365 t = t i m e i n y e a r s$