haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account…

haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account giving 3.0% interest. when the cd reaches maturity, how much more interest will it have generated than the savings account? a. $5,129.72 b. $3,650.32 c. $2,853.54 d. $2,276.46

haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account giving 3.0% interest. when the cd reaches maturity, how much more interest will it have generated than the savings account? a. $5,129.72 b. $3,650.32 c. $2,853.54 d. $2,276.46

Answer

Explanation:

Step1: Calculate CD interest

Use simple - interest formula $I = Prt$, where $P = 16820$, $r=0.058$, $t = 9$. So $I_{CD}=16820\times0.058\times9=16820\times0.522 = 8780.04$.

Step2: Calculate savings account interest

Use simple - interest formula $I = Prt$, where $P = 21950$, $r = 0.03$, $t=9$. So $I_{savings}=21950\times0.03\times9=21950\times0.27=5926.5$.

Step3: Find the difference in interest

Subtract the savings account interest from the CD interest: $I_{difference}=I_{CD}-I_{savings}=8780.04 - 5926.5=2853.54$.

Answer:

C. $$2,853.54$