A person places 5000 in a certificate of deposit that


A person places $5,000 in a certificate of deposit that matures in 20 years and pays annual interest rate of 3%. What will be the value at maturity if the interest is reinvested in the deposit? a. How much interest will accumulate after 20 years? b. How much would they receive annually if they chose not to reinvest the interest and what would be the total interest paid out over 20 years? c. Why are answers a and b different?

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Financial Management: A person places 5000 in a certificate of deposit that
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