haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account…

haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account giving 3.0% interest. when the cd reaches maturity, how much more interest will it have generated than the savings account?\na. $5,129.72\nb. $3,650.32\nc. $2,853.54\nd. $2,276.46\nplease select the best answer from the choices provided

haley invests $16,820 in a nine - year cd bearing 5.8% interest, and $21,950 in an online savings account giving 3.0% interest. when the cd reaches maturity, how much more interest will it have generated than the savings account?\na. $5,129.72\nb. $3,650.32\nc. $2,853.54\nd. $2,276.46\nplease select the best answer from the choices provided

Answer

Explanation:

Step1: Calculate CD interest

Use simple - interest formula $I = Prt$, where $P$ is principal, $r$ is interest rate, and $t$ is time. For CD, $P_{1}=16820$, $r_{1}=0.058$, $t = 9$. So $I_{1}=P_{1}r_{1}t=16820\times0.058\times9 = 16820\times0.522=$8780.04$.

Step2: Calculate savings account interest

For savings account, $P_{2}=21950$, $r_{2}=0.03$, $t = 9$. So $I_{2}=P_{2}r_{2}t=21950\times0.03\times9=21950\times0.27=$5926.5$.

Step3: Find the difference in interest

$I = I_{1}-I_{2}=8780.04 - 5926.5=$2853.54$.

Answer:

C. $$2,853.54$