Questions: Billy plans to invest 18,000 in a CD that compounds 1.5% monthly. He must keep his money in the CD for 10 years. How much money will he have when the investment ends? 19,629.83 20,911.06 21,632.49 22,022.74

Solution Steps

We are given the following values for the investment:

• Principal amount \( P = 18000 \)
• Monthly interest rate \( r = 0.015 \)
• Compounding frequency \( n = 12 \)
• Time period \( t = 10 \)

We use the compound interest formula:

\[ A = P \left(1 + \frac{r}{n}\right)^{nt} \]

Substituting the values into the formula:

\[ A = 18000 \left(1 + \frac{0.015}{12}\right)^{12 \times 10} \]

After performing the calculations, we find:

\[ A \approx 20911.0575 \]

Final Answer