Question

A 180-day $3 million CD has a 4.25 percent annual rate quote. If you buy the CD, how much will you collect in 180 days?

Answer 1

To calculate the amount you will collect at the end of 180 days, use the formula Amount = Principal + (Principal x Rate x Time).

Step-by-step explanation:

To calculate the amount you will collect at the end of 180 days, we can use the formula:

Amount = Principal + (Principal x Rate x Time)

Given that the principal (P) is $3 million, the rate (R) is 4.25% (or 0.0425 as a decimal), and the time (T) is 180 days (or 0.5 years), we can substitute these values into the formula:

Amount = $3,000,000 + ($3,000,000 x 0.0425 x 0.5)

Simplifying the equation, we get:

Amount = $3,000,000 + $63,750 = $3,063,750

Therefore, you will collect $3,063,750 at the end of 180 days.

Answer 2

$3,063,750

Step-by-step explanation:

A 180 day $3,000,000 CD

Annual rate = 4.25%

Collection in 180 days = ?

$3,000,000 * 4.25% * 180/360

= $3,000,000 * 0.02125

= $63,750

Total amount to collect after 180 days = $3,000,000 + $63,750

Total amount to collect after 180 days = $3,063,750