a bank offers a four - year cd with an interest rate of 2.75%. the penalty for early withdrawal from the cd…

a bank offers a four - year cd with an interest rate of 2.75%. the penalty for early withdrawal from the cd is nine months of simple interest, calculated on the amount withdrawn. rachel invests $6,200. if she withdraws $2250 after one year, how much will the penalty be? round answer to the nearest dollar.\na. $46\nb. $56\nc. $128\nd. $557\nplease select the best answer from the choices provided

a bank offers a four - year cd with an interest rate of 2.75%. the penalty for early withdrawal from the cd is nine months of simple interest, calculated on the amount withdrawn. rachel invests $6,200. if she withdraws $2250 after one year, how much will the penalty be? round answer to the nearest dollar.\na. $46\nb. $56\nc. $128\nd. $557\nplease select the best answer from the choices provided

Answer

Explanation:

Step1: Convert months to years

The penalty is 9 - month simple - interest. Since there are 12 months in a year, $t=\frac{9}{12}=0.75$ years.

Step2: Identify the principal and interest rate

The principal amount of the early - withdrawal $P = 2250$, and the annual interest rate $r=2.75%=0.0275$.

Step3: Use the simple - interest formula

The simple - interest formula is $I = Prt$. Substitute $P = 2250$, $r = 0.0275$, and $t = 0.75$ into the formula: $I=2250\times0.0275\times0.75$ $I = 2250\times0.020625$ $I = 46.40625\approx46$

Answer:

A. $46$