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# Mr. T deposits $10K in a CD earning P percent annual  post reply Question banks Downloads My Bookmarks Reviews Important topics Author Message Current Student Joined: 29 Jan 2005 Posts: 5218 Followers: 26 Kudos [?]: 404 [0], given: 0 Mr. T deposits$10K in a CD earning P percent annual [#permalink]

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27 Oct 2005, 09:02
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Mr. T deposits $10K in a CD earning P percent annual interest compounded quarterly. What is the value of P? 1. During the term of the CD, he earns$18 more than he would if the interest were not compounded.
2. He withdrawls all the money 6 months after depositing it.
VP
Joined: 22 Aug 2005
Posts: 1113
Location: CA
Followers: 1

Kudos [?]: 111 [0], given: 0

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27 Oct 2005, 09:13
C.

10 * (1.0025P)^2 - P - 0.05P = 18
solve for P
Senior Manager
Joined: 04 May 2005
Posts: 279
Location: CA, USA
Followers: 1

Kudos [?]: 57 [0], given: 0

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27 Oct 2005, 09:21
C

from A alone, we have two unknowns, P and the length of deposit
from B we have the length of deposit

therefore P is solvable with A+B

10,000( (1+p/4)^2 - (1+p/2) ) = 18
27 Oct 2005, 09:21
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