Dr. Zaius invests $10,000 in a CD with an annual interest rate of 4% that compounds semi-annually (twice a year). After six months, he rolls over the CD into another CD with an annual interest rate of 5% that compounds annually. After six months in the second CD, how much does Dr. Zaius have, in dollars?
+36916 period is six months
interest per period .04 / 2 = .02
for the first 6 months final amount = 10000(1+.02)1 = $ 10 200
Next six months
interest is compounded annually .05
period = 1/2
now starts with 10200
10200 (1+.05)1/2 = $ 10451.89
