Charley wants to have $950,000 when he retires in a year. if he currently has $900,000 to put in a 1-year cd, which of these aprs and compounding periods will allow him to reach his goal? a. an apr of 5.44% compounded semiannually b. an apr of 5.42% compounded monthly c. an apr of 5.34% compounded daily d. an apr of 5.43% compounded quarterly

Option B - An APR of 5.42% compounded monthly

Step-by-step explanation:

Given : Charley wants to have $950,000 when he retires in a year. If he currently has $900,000 to put in a 1-year CD.

To find : Which of these APRs and compounding periods will allow him to reach his goal?        

Solution :

Using compound interest formula,

Where, A is the amount  A=$950,000

P is the principle P=900,000    

r is the rate r=?

t is the time t= 1 years

Substitute the value,

Option B -  An APR of 5.42% compounded monthly.

When we substitute the value r=5.42%

The nearest amount we get.

Therefore, Option B is correct.

step-by-step explanation:

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step-by-step explanation: