You deposit $10000 into a CD with 5% interest compounded monthly. The CD will last 10 years. When you use the compound interest formula we discussed to find the amount you will have after 10 years, you will have: PN = 10000(a number). What is the number? Round to 3 decimal places.

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.