Today Thomas deposited $100,000 in a three-year, 12% CD that compounds quarterly. What is the maturity value of the CD?
A)$109,270.
B)$119,410.
C)$142,576.
D)$309,090.FV = $100,000 x 1.42576* = $142,576 *FV of $1: n = 12; i = 3%

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we can find the maturity value of the CD:
FV = P(1 + r/n)^(nt)
Where:
P = $100,000 (initial deposit)
r = 0.12 (annual interest rate)
n = 4 (quarterly compounding)
t = 3 (number of years)

FV = $100,000(1 + 0.12/4)^(4*3)
FV = $100,000(1.03)^12
FV = $142,576.49

Therefore, the maturity value of the CD is $142,576. Answer choice C is correct.

Today Thomas Deposited $100,000 in a Three-Year, 12% CD That