Question

1) Ethan put $700 into a Certificate of Deposit (CD) account that earns 1.8% interest each year. What will the interest of the CD account be after 6 years?

Answer 1

Answer:$75.60

Explanation:

i=interest

i=$700×0.018×6= 75.60

(remember decimal divided by 100 so 1.8%/100=0.018)

the interest after 6 years would be $75.60

Answer 2

The interest After 6 years is $ 79.03

Explanation:

Given as :

The principal amount deposited in account = $ 700

The rate interest earn = 1.8 % per year

The Time period = 6 years

From Compounded Method

Amount = Principal ×
`(1 +(\textrm Rate)/(100))^{\textrm Time`

Or, Amount = $ 700 ×
`(1 +(\textrm 1.8)/(100))^{\textrm 6`

Or, Amount = $ 700 ×
`1.018^(6)`

Or, Amount = $ 700 × 1.1129

∴ Amount = $ 779.03

Now , Interest = Amount - Principal

I.e Interest = $ 779.03 - $ 700 = $ 79.03

Hence The interest After 6 years is $ 79.03 , Answer