for a certain cd, the initial investment is $1,250 and the annual interest rate is 3.6%. how much interest…
for a certain cd, the initial investment is $1,250 and the annual interest rate is 3.6%. how much interest is earned in year one?\nyear one interest = $?\nyear two interest = $\ntotal interest = $\ndo not round your answer.
Answer
Explanation:
Step1: Recall Simple Interest Formula
The simple interest formula is ( I = P \times r \times t ), where ( I ) is interest, ( P ) is principal, ( r ) is annual rate (decimal), ( t ) is time (years).
Step2: Convert Rate to Decimal
Given ( r = 3.6% = \frac{3.6}{100} = 0.036 ), ( P = 1250 ), ( t = 1 ).
Step3: Calculate Interest
Substitute into formula: ( I = 1250 \times 0.036 \times 1 ). ( 1250 \times 0.036 = 45 ).
Answer:
45