Ethan put $4000 in a 2-year CD paying 5% interest, compounded monthly. After 2 years, he withdrew all his money. What was the amount of the withdrawal?

The future worth of money invested with a compound interest is calculated through the equation,

F = P x (1 + ieff) ^n

where F is the future worth, P is the present worth, ieff is the effective interest and n is the number of years.

ieff = (1 + i/m) ^ (m) - 1

where m is the number of compoundings per year. In this case, m = 12.

ieff = (1 + 0.015/12) ^12 - 1 = 0.05116

Substituting this to the equation above,

F = ($4000) x (1 + 0.05116) ^2 = $4419.76

Thus, the amount of the withdrawal is approximately $4419.76.