Question

Assume that a three-month CD purchased for $1900 pays simple interest at an annual rate of 7%. How much total interest does it earn? What is the balance at maturity?

Answer 1

Answer: Total interest: $399

Balance = $2,299

Explanation:

Total interest=

1900 * 7/100 * 3

= 133 * 3

= 399

Balance at maturity:

1900 + 399

= 2299