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16 March, 13:00

Find how much interests $15000 earns in 2 years in a certificate of deposit paying 7.5% interest compounded quarterly the interests earned in 2 years is

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  1. 16 March, 13:22
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    Step-by-step explanation:

    Initial amount deposited in the certificate of deposit is $15000 This means that the principal so

    P = 15000

    It was compounded quarterly. This means that it was compounded 4 times in a year. So

    n = 4

    The rate at which the principal was compounded is 7.5%. So

    r = 7.5/100 = 0.075

    It was compounded for 2 years. So

    t = 2

    The formula for compound interest is

    A = P (1+r/n) ^nt

    A = total amount in the account at the end of t years. Therefore

    A = 15000 (1+0.075/4) ^4*2

    A = 15000 (1.01875) ^8 = $17403

    The interest would be

    17403 - 15000 = $2403
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