Question

POSSIBLE POINTS 100

A bank pays 3% annual simple interest on CDs (certificates of deposit) of $25,000. The Branson family
invests in 3 of the $25,000 CDs. How much interest does the family make in one year?
O A $22.50
OB $22,500.00
OC $2,250.00
OD $225.00

Answer 1

Total interest in 1 year = $2,250

Explanation:

Given:

Rate of simple interest = 3% = 0.03

Amount of investment = $25,000

Number of investment = 3

Find:

Total interest in 1 year .

Computation:

Simple interest = Amount of investment × Rate of simple interest

Simple interest = $25,000 × 0.03

Simple interest = $750

Total interest in 1 year = Simple interest × Number of investment

Total interest in 1 year = $750 × 3

Total interest in 1 year = $2,250