Bill deposited $5,250 in a 15-year CD at Centre County Bank.  If the interest rate is 5.5% compounded quarterly, how much will the CD be worth maturity?


To determine how much the Certificate of Deposit (CD) will be worth at maturity, we use the compound interest formula:

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

Where:
- $ A $ is the amount of money at maturity (the value of the CD),
- $ P $ is the principal amount (initial deposit),
- $ r $ is the annual interest rate (in decimal form),
- $ n $ is the number of times the interest is compounded per year,
- $ t $ is the time the money is invested or borrowed for, in years.

Given:
- $ P = 5250 $
- $ r = 5.5\% = 0.055 $
- $ n = 4 $ (since interest is compounded quarterly),
- $ t = 15 $ years.

Now we plug these values into the formula:

\[
A = 5250 \left(1 + \frac{0.055}{4}\right)^{4 \times 15}
\]

Let me calculate that for you.

Bill deposited $5,250 in a 15-year CD at Centre County Bank. If the interest rate is 5.5% compounded quarterly, how much will the CD be worth at maturity?

Learn how to calculate the value of a 15-year Certificate of Deposit (CD) with a $5,250 initial deposit and 5.5% interest compounded quarterly. This example demonstrates how to apply the compound interest formula step-by-step, making it suitable for students in Grades 10-12.

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