Question

Karl deposits $900 in a CD. He will earn 5% compound interest each year for five years. How much interest will Karl earn in 5 yrs?

Answer 1

$225 of interest in 5 years.

Explanation:

Step 1: 5% x 5 = 25%.

Step 2: 900 ÷ 4 = 225.

Karl will earn $225 of interest in 5 years.