Final answer:
Philomena will make more than $14.06 in interest the second month.
Step-by-step explanation:
The amount of interest Philomena makes in the second month will be more than $14.06.
To understand why, we need to consider how compound interest works.
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- Compound interest is calculated based on the principal amount (the initial amount of money) and the interest rate.
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- When interest is compounded monthly, the interest rate is divided by 12 and applied each month.
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- Since Philomena made $14.06 in interest the first month, we know that the interest rate for the CD is more than $14.06 divided by the principal amount of money she invested.
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- Therefore, in the second month, Philomena will earn more interest because the interest will be applied to the increased principal amount (the original amount plus the first month's interest).