Answer: Doris was left with $4216.93.
Step-by-step explanation:
Since we have given that
Principal amount = $ 4000
Rate of interest = 6%
He put $4000 in a 5 year CD paying 6% interest compounded monthly.
After 2 years, she withdrew all her money.
so, Amount after 2 years when it is compounded annually.
[tex]A=4000(1+\dfrac{6}{12\times 100})^{12\times 2}\\\\A=4000(1+0.005)^{24}\\\\A=4000(1.005)^{24}\\\\A=\$4508.64[/tex]
As an early withdrawal penalty, she paid back all the interest she made during the first year.
[tex]Interest=4000[(1+0.005)^{12}-1]\\\\Interest=\$246.71[/tex]
Amount left with Doris is given by
[tex]\$4508.64-\$246.71\\\\=\$4261.93[/tex]
Hence, Doris was left with $4216.93.
