Which of the following best describes the amount of money you'll have if you $1000 into a CD earning 2% annual compound for 10 years? a.) The same $1000 you started with
b.) Exactly $1200
c.) slightly more than $1,200
d.) $2000

  c.)  slightly more than $1,200

Step-by-step explanation:

Simple interest at 2% for 10 years would give you exactly ...

  A = P(1 +rt) = 1000(1 +.02(10)) = 1000(1.2) = 1200

Compound interest gives you interest on the interest, so the amount will be greater than 1200.

__

The "rule of 72" tells you the doubling time at a rate of 2% is approximately ...

  72/2 = 36 years

So, in 10 years, you will not achieve an account balance of $2000.

__

We have determined that choices a, b, d are unreasonable, and that choice c is reasonable.

Comment on the numbers

If you work through the exact numbers, you find the CD will have a value of $1,218.99, and that the time it would take to reach $2000 is 35 years.

abde or 1,2,4, 5 is the answer

step-by-step explanation: