85.1k views
3 votes
Devin invested $750 in a CD that pays 6% simple interest, calculated quarterly. How much money will Devin earn in 3 years?

User Chikitin
by
6.5k points

2 Answers

0 votes

Final answer:

To find the simple interest earned by Devin's $750 investment over 3 years at a quarterly calculated rate of 6%, the calculation shows that Devin will earn a total of $135 in interest.

Step-by-step explanation:

Devin invested $750 in a CD that pays 6% simple interest, calculated quarterly. To calculate the interest earned over 3 years, we apply the formula for simple interest: Interest = Principal × Rate × Time. Here, the principal is $750, the rate is 6% per year or 0.06, and the time is 3 years. Since the interest is calculated quarterly, the rate needs to be adjusted accordingly.

The interest earned per quarter is $750 × (0.06/4), and there are 4 quarters in a year, so for 3 years, there will be 12 quarters. Therefore, the total interest earned in 3 years would be:

$750 × (0.06/4) × 12.

After calculating this, you'll find that the total simple interest earned over the 3-year period is $135.

User Sebastian Schrader
by
6.5k points
5 votes
$885.00 in three years
User Gmartellino
by
6.3k points