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Answer :
To calculate the interest earned on a Certificate of Deposit (CD) with a fixed maturity period using simple interest, we can follow these steps:
1. Identify the given values:
- Initial investment (principal) = [tex]$940
- Annual interest rate = 2.6%
- Time period = 2 years
2. Convert the annual interest rate to a decimal:
- Since 2.6% means 2.6 per 100, as a decimal, this is \( \frac{2.6}{100} = 0.026 \).
3. Use the simple interest formula:
The simple interest formula is:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]
4. Plug the values into the formula:
- Principal = $[/tex]940
- Rate = 0.026
- Time = 2 years
[tex]\[ \text{Interest} = 940 \times 0.026 \times 2 \][/tex]
5. Calculate the interest:
- First, multiply the principal by the rate: [tex]\( 940 \times 0.026 \)[/tex]
- Then, multiply the result by the time: [tex]\( (940 \times 0.026) \times 2 \)[/tex]
6. Calculate the final interest:
- The calculated interest earned over the 2-year period is [tex]$48.88.
Therefore, the interest earned on the CD over 2 years is $[/tex]48.88 rounded to the nearest hundredth.
1. Identify the given values:
- Initial investment (principal) = [tex]$940
- Annual interest rate = 2.6%
- Time period = 2 years
2. Convert the annual interest rate to a decimal:
- Since 2.6% means 2.6 per 100, as a decimal, this is \( \frac{2.6}{100} = 0.026 \).
3. Use the simple interest formula:
The simple interest formula is:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]
4. Plug the values into the formula:
- Principal = $[/tex]940
- Rate = 0.026
- Time = 2 years
[tex]\[ \text{Interest} = 940 \times 0.026 \times 2 \][/tex]
5. Calculate the interest:
- First, multiply the principal by the rate: [tex]\( 940 \times 0.026 \)[/tex]
- Then, multiply the result by the time: [tex]\( (940 \times 0.026) \times 2 \)[/tex]
6. Calculate the final interest:
- The calculated interest earned over the 2-year period is [tex]$48.88.
Therefore, the interest earned on the CD over 2 years is $[/tex]48.88 rounded to the nearest hundredth.
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