Chapter $12$ Investments

Lesson $12\mathrm{.}1$ Certificates of Deposit

Mathematics

Your money earns interest at a higher rate when you buy a certificate of deposit $($CD$)$ than it does when you invest it in a regular savings account. Most CDs earn interest compounded daily, monthly, or quarterly.

Amount $=$ Original Principal $$ Amount of $$1\mathrm{.}00$

Compound Interest $=$ Amount $-$ Original Principal

Use the compound interest table to determine the interested earned.

$\backslash$table$[[,,,,,,],[$hate$,,,1\mathrm{.}030339,1\mathrm{.}127491,1\mathrm{.}127328,1\mathrm{.}126992],[3\mathrm{.}00\%,1\mathrm{.}030453,1\mathrm{.}030416,1\mathrm{.}032898,1\mathrm{.}138822,1\mathrm{.}138628,1\mathrm{.}138230],[3\mathrm{.}25\%,1\mathrm{.}033032,1\mathrm{.}032989,1\mathrm{.}035462,1\mathrm{.}150266,1\mathrm{.}150039,1\mathrm{.}149574],[3\mathrm{.}50\%,1\mathrm{.}035618,1\mathrm{.}035567,1\mathrm{.}038031,1\mathrm{.}161825,1\mathrm{.}161563,1\mathrm{.}161023],[3\mathrm{.}75\%,1\mathrm{.}038210,1\mathrm{.}038151,1\mathrm{.}040604,1\mathrm{.}173501,1\mathrm{.}173199,1\mathrm{.}172579],[4\mathrm{.}00\%,1\mathrm{.}040808,1\mathrm{.}040742,1\mathrm{.}043182,1\mathrm{.}185293,1\mathrm{.}184949,1\mathrm{.}184242],[4\mathrm{.}25\%,1\mathrm{.}043413,1\mathrm{.}043338,1\mathrm{.}045765,1\mathrm{.}197204,1\mathrm{.}196814,1\mathrm{.}196015],[4\mathrm{.}50\%,1\mathrm{.}046025,1\mathrm{.}045940,,,,]]$

Complete the table.

$7.$ Lorena Ramos can invest $$4,000$ in a $1-$year CD at $4\%$ compounded monthly:

a$.$ What is the amount?

b$.$ What is the interest earned?