for a certain cd, the initial investment is $1,100 and the annual interest rate is 4%. how much interest is…
for a certain cd, the initial investment is $1,100 and the annual interest rate is 4%. how much interest is earned in year one? year one interest = $? year two interest = $ total interest = $ do not round your answer.
Answer
Explanation:
Step1: Identify the formula
Simple - interest formula 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 annual interest rate $r = 4%=0.04$. The principal amount $P=$1100$ and $t = 1$ year.
Step3: Calculate the interest for year one
Substitute $P = 1100$, $r=0.04$, and $t = 1$ into the formula $I=Prt$. So, $I=1100\times0.04\times1$. $I = 44$
Answer:
44