jane opens a certificate of deposit (cd) in the amount of $10,500 at a 4.5% interest rate compounded…

jane opens a certificate of deposit (cd) in the amount of $10,500 at a 4.5% interest rate compounded annually. what is the amount of interest she will earn on the cd in 1 year if she makes no additional deposits or withdrawals?

jane opens a certificate of deposit (cd) in the amount of $10,500 at a 4.5% interest rate compounded annually. what is the amount of interest she will earn on the cd in 1 year if she makes no additional deposits or withdrawals?

Answer

Explanation:

Step1: Identify the formula for simple - interest

The formula for simple interest is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years.

Step2: Convert the interest rate to decimal

The interest rate $r = 4.5%=0.045$. The principal amount $P=$10500$ and $t = 1$ year.

Step3: Calculate the interest

Substitute the values into the formula: $I=Prt=10500\times0.045\times1$. $I = 472.5$

Answer:

$472.5$