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You have already saved $6850 to buy a used car. You invest this money in a...

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Finance

You have already saved $6850 to buy a used car. You invest thismoney in a certificate of deposit earning 0.30% APR compoundedmonthly. How many years will it take your account to reach yourtarget of $7275 in order to buy the new car?

Answer & Explanation Solved by verified expert
4.2 Ratings (820 Votes)
First of all we shall learn how to calculate interest oncertificate of depositCompute the periodic interest rate by dividing the base annualpercentage rate by the number of times each year interest iscalculated and added to the CDs balance called compounding Forexample if interest on the CD is compounded monthly divide thebase percentage rate by 12 to find the periodic interest    See Answer
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