Saved Help Save Present and future value tables of $1 at 3% are presented below.

Question

Saved Help Save Present and future value tables of $1 at 3% are presented below. 1 1.03000 .970871.0000 .970871.0300 1.0000 2 1.06098 .94260 3 1.09273 0.91514 4. 2.03001.91347 2.8909 1.97687 3.0909 2.828613.1836 2.91347 4.1836 3.7171 4.3091 3.82861 5.46844.71718 6.66255.57971 .813097.6625 6.23028 7.8923 6.41719 9.15917.23828 7.78611 10.4639 8.01969 10 1.34392 .74489 11.4639 8.53020 11.8078 8.78611 13.1920 9.53020 12|1.42576 8.70138| 14.1929| 9.95400| 14.61 0.25262 19.39 | 1,12551 ?. 88849 5 1.15927 e.862615.3091 4.579715 6 1.19405 .83748 7 1-22987 . 389 8 1.26677 .78941 6.46845.41719 8.8923 7.01969 9 1.30477 .76642 10.1591 13 1.46853 8.68095 15.6178|?,63496|16.08 0. 14 1.51259 .66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 .64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 |12.56110 20.7616 12.93794 Today, Thomas deposited $200,000 in a 2-year, 12% CD that compounds quarterly what is the maturity value of the CD?

Explanation / Answer

Amount Deposited = $200,000
Period = 2 years or 8 quarters
Annual Interest Rate = 12%
Quarterly Interest Rate = 3%

Maturity Value = $200,000 * FV of $1 (3%, 8)
Maturity Value = $200,000 * 1.26677
Maturity Value = $253,354

So, Maturity Value of the CD is $253,354

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