Question

After 2 years, Deion earned $270 in simple interest from a CD into which he initially deposited $6000. What was the annual interest rate of the CD?

Answer 1

4.5%

Step-by-step explanation:

To find the annual interest rate of the CD in this problem , we can use the simple interest formula:

I = Prt

Where I is the amount of interest earned, P is the initial deposit, r is the interest rate as a decimal, and t is the time period in years.

In this case, we know that Deion earned $270 in interest over 2 years and that he initially deposited $6000, so we can set up the equation as:

270 = 6000 * r * 2

Simplifying this equation and solving for r, we get:

r = 0.045, or 4.5%

Therefore, the annual interest rate of the CD was 4.5%.