Question

Haley invests $16,820 in a nine-year CD bearing 5.8% interest, and $21,950 in an online savings account giving 3.0% interest. When the CD reaches maturity, how much more interest will it have generated than the savings account?

Answer 1

C. $2,853.54

Explanation:

I just answered it correct

Answer 2

$2853.5

Explanation:

Let us assume that the interest rate of both the investments of Haley is simple interest.

So, $16820 amounts of investment in nine-year CD bearing 5.8% interest will get interest of
`16820 * (5.8)/(100) * 9 = 8780` dollars.

Again, $21950 amounts of investment in an online savings account giving 3% interest will give interest of
`21950 * (3)/(100) * 9 = 5926.5` dollars.

Therefore, the nine-year CD will give more interest by $(8780 - 5926.5) = $2853.5. (Answer)