OG - PS - #75

by CC Wed Sep 12, 2007 4:45 pm

The book's explanation uses the interest formula. How would one approach this problem w/o using the interest formula?

Leona bought a 1 year $10,000 certificate of deposit that paid interest at an annual rate of 8% compounded annually. What was the total amount of interest paid on this certificate at maturity?

$10,464
$864
$816
$800
$480

by **guest** Thu Sep 13, 2007 11:23 am

I'm wondering if I can get an explanation to this problem?

thanks!!

by **StaceyKoprince** Mon Sep 17, 2007 8:05 pm

Please double-check the text of this question. Someone else posted this recently (not sure if it was you) and I asked him / her to double-check also. As written, the problem gives an annual interest rate "compounded annually." If it's compounded on the same schedule as the rate, then it never actually compounds, so I highly doubt that this is the original wording of the problem.

Also, FYI, the fastest you'll typically get a response is 2-3 days; the forums are only staffed 1 hour per day on business days. When traffic is heavy, it can take even longer.