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Answer :
To find out how much interest is earned on a CD (Certificate of Deposit) with a 2-year fixed maturity, an initial investment of [tex]$940, and an annual interest rate of 2.6%, we can follow these steps:
1. Identify the Initial Investment:
The initial amount invested is $[/tex]940.
2. Determine the Annual Interest Rate:
The annual interest rate given is 2.6%, which can be written as a decimal as 0.026 (because 2.6% equals 2.6 divided by 100).
3. Determine the Time Period:
The investment period is 2 years.
4. Calculate the Interest Earned:
Use the formula for simple interest, which is:
[tex]\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\][/tex]
Substituting the values we have:
[tex]\[
\text{Interest} = 940 \times 0.026 \times 2
\][/tex]
5. Perform the Calculations:
- First, multiply the principal by the rate:
[tex]\( 940 \times 0.026 = 24.44 \)[/tex]
- Next, multiply this result by the number of years:
[tex]\( 24.44 \times 2 = 48.88 \)[/tex]
6. Round to the Nearest Hundredth:
The interest earned, after calculation, is [tex]$48.88. Since it is already rounded to the nearest hundredth, there's no change needed.
So, the interest earned on the CD over the 2 years is $[/tex]48.88.
1. Identify the Initial Investment:
The initial amount invested is $[/tex]940.
2. Determine the Annual Interest Rate:
The annual interest rate given is 2.6%, which can be written as a decimal as 0.026 (because 2.6% equals 2.6 divided by 100).
3. Determine the Time Period:
The investment period is 2 years.
4. Calculate the Interest Earned:
Use the formula for simple interest, which is:
[tex]\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\][/tex]
Substituting the values we have:
[tex]\[
\text{Interest} = 940 \times 0.026 \times 2
\][/tex]
5. Perform the Calculations:
- First, multiply the principal by the rate:
[tex]\( 940 \times 0.026 = 24.44 \)[/tex]
- Next, multiply this result by the number of years:
[tex]\( 24.44 \times 2 = 48.88 \)[/tex]
6. Round to the Nearest Hundredth:
The interest earned, after calculation, is [tex]$48.88. Since it is already rounded to the nearest hundredth, there's no change needed.
So, the interest earned on the CD over the 2 years is $[/tex]48.88.
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