If the interest is compounded yearly, it will be worth $525.00
If it is compounded monthly, after two months $551
after 3 months $578.00
after 4 months $607.75
5 - $638.14
6 - $670.05
7 - $703.55
8 months - $738.73
9 - $775.66
10 - $814.45
11 - $855.17
12 - $ $897.93
It depends on how often the CD's interest is compounded, either monthly or yearly. If it is compounded yearly, it is worth $525.00. If it is compounded monthly, it would be worth $897.93 at the end of one year.
Each time the interest is compounded just multiply the starting amount is it worth times 1.05. Then you have a new total. At the end of the next compounding period, you multiply the new amount from before times 1.05, giving you another new total. The interest is added each time to the total. The new interest is added to both the principle and the interest.
convert rate to decimal form: 1.05 / 100 = 0.0105
if compounded monthly, monthly "r" = 0.0105 /12 = 0.00088
FV = PV(1 + r)^n
Future Value after 12 months: $500(1.00088^12) = $505.27534, round to $505.28
that cost 500 and is intrest is 1.05 for 12 months?
