Answer:
The amount of interest earned by the CD at an APR of 1.94% is $195.73
Step-by-step explanation:
The amount of interest earned over a year is the future value of the CD less the amount of initial investment.
FV=PV*(1+r/t)^N*t
FV is the value of the CD in a year' s time
PV is the value of the initial investment
r is the rate of return of 1.94%
t is the number of compounding periods in a year, which is 12
FV=$10000*(1+1.94%/12)^1*12
FV=$10000*(1+0.001616667 )^12
FV=$10000*1.019573435
FV=$10195.73
Interest =FV-PV
interest=$10195.73-$10,0000
interest=$195.73
The interest is divided by 12 since compounding is done monthly, the same reason why N was multiplied by 12