Final answer:
To find the amount of interest earned on a CD, use the formula: Interest = Principal × Rate × Time. Plugging in the values, the interest earned in this case would be $656.25.
Step-by-step explanation:
To find the amount of interest earned, we can use the formula: Interest = Principal × Rate × Time. In this case, the principal is $25,000, the rate is 4.25% (or 0.0425 as a decimal), and the time is 7 months (or 7/12 of a year).
Plugging in the values, we have:
Interest = $25,000 × 0.0425 × (7/12) = $656.25
Therefore, you would earn $656.25 in interest if you cashed the CD after seven months.