Suppose you have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest, compounded annually. How much will you have when the CD matures
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Suppose you have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest, compounded annually. How much will you have when the CD matures
You need to use a Future Value of $1 table to get the interest factor. The interest factor will be at 3 periods @ 4% interest. Take this number * your $2,000 to get your answer.
This table is in accounting textbooks as well as in a finance textbook.
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