9 You currently have AED90000 and plans to purchase a 6year

9. You currently have AED90,000 and plans to purchase a 6-year certificate of deposit (CD). How much will you have when the CD matures if it pays 7% interest, compounded annually?

Solution

Present Value (PV)                       90,000 No of years (n) 6 Interest Rate (r\') 7% Future Value= PV*(1+r)^n = 90000*(1+0.07)^6 =                    135,066 The amount will be $135,066 after 6 years