Question

What is the balance after 3

years on a CD with an initial
investment of $2,200.00 and a
2.95% interest rate?
A. $2,205.90
C. $6,490.00
B. $2,329.80
D. $2,400.50

Answer 1

Explanation:

The balance after 3 years can be calculated as follows:

I = P * r * t

Where:

I = interest

P = principal amount (2200)

r = interest rate (0.0295)

t = time in years (3)

So,

I = 2200 * 0.0295 * 3

I = 153.1

The final balance would be:

P + I = 2200 + 153.1

P + I = 2353.1

The final balance after 3 years is $2353.1, which is closest to option B ($2,329.80).