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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?

 Oct 18, 2020
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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

 
 Oct 18, 2020

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