Kyle has $1,000 in cash received for high school graduation gifts from various relatives. He wants to invest it in a certificate of deposit (CD) so that he will have a down payment on a car when he graduates from college in five years. His bank will pay 6% for the five-year CD. How much will Kyle have in five years to put down on his car?

the amount have in five years is $1,338

Step-by-step explanation:

The computation of the amount have in five years is shown below

As we know that

Future value = Present value × (1 + rate of interest)^number of years

= $1,000 × (1 + 0.06)^5

= $1,000 × 1.06^5

= $1,338

Hence, the amount have in five years is $1,338

We simply applied the above formula so that the correct value could come

And, the same is to be considered