Suppose you buy a CD for $300 that earns 3% APR and is compounded quarterly. The CD matures in 3 years. How much will this CD be

Question

1 month ago

14

worth at maturity? A. $309.12 B. $309.10 C. $328.14 D. $303.01

2 answers:

PIT_PIT [12.4K] · Answer 1 · 2026-03-30T21:53:15+03:00

Provided: Principal Amount (P) = $300

Interest rate (r) = (3/4) compounded quarterly.

Total quarters in 3 years (n) = 3×4 = 12

To determine: The amount at maturity for the CD, let it be (A)

Formula: Compound Amount (A) = P [ 1 + (r ÷100)]ⁿ

Thus, (A) = P [ 1 + (r ÷100)]ⁿ

or, = $300 [ 1 + (3 ÷400)]¹²

or, = $300 × [ 403 ÷ 400]¹²

or, = $300 × 1.0938069

or, = $ 328.14

Thus, the correct choice is C. $328.14

babunello [11.8K] · Answer 2 · 2026-03-30T21:53:09+03:00

Response:

C. $328.14

Detailed explanation:

The information states that you purchased a CD for $300 with an APR of 3% compounded quarterly, maturing in 3 years.

To calculate the value of the CD at maturity, we will apply the compound interest formula.

$A=P(1+\frac{r}{n})^{n\cdot t}$ , where,

A = Total amount after t years,

P = Principal amount,

r = Annual interest rate expressed in decimal,

n = Frequency of interest compounding per year.

t = Duration in years.

$3\%=\frac{3}{100}=0.03$

Insert the given values:

$A=300(1+\frac{0.03}{4})^{4\cdot 3}$

$A=300(1+0.0075)^{12}$

$A=300(1.0075)^{12}$

$A=300*1.0938068976709831$

$A=328.14206930129493$

$A\approx 328.14$

As a result, the CD's value at maturity will be $328.14.