Question

After three years Remington or $390 and simple interest from a CD into which she initially deposited $4000 what was the annual interest rate of the CD

Answer 1

The annual interest will be calculated as under -

Given, total simple interest for 3 years = $ 390

Principal amount = $ 4000

Interest in total for 3 years = $ 390 ÷ $ 4000 × 100 = 9.75%

Interest for 1 years = 9.75 % ÷ 3 = 3.25%