You deposit X dollars into a 3-year certificate of deposit that pays 4.75 percent annual interest.At the end of the 3 years you have $4,229.70.What number of dollars,X,did you deposit?
A)$3,680.00
B)$3,712.77
C)$3,750.00
D)$3,772.57

Question

Quizplus · Accepted Answer

The correct answer is A.The formula for the future value of a certificate of deposit is:FV = PV * (1 + r)^nwhere:FV is the future valuePV is the present valuer is the annual interest raten is the number of yearsIn this case, we have:FV = $4,229.70r = 4.75% = 0.0475n = 3Substituting these values into the formula, we get:$4,229.70 = PV * (1 + 0.0475)^3$4,229.70 = PV * 1.154634PV = $4,229.70 / 1.154634PV = $3,680.00Therefore, the number of dollars deposited was $3,680.00.

You Deposit X Dollars into a 3-Year Certificate of Deposit