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Bill Casler bought a $2000, 9-month certificate of deposit (CD) that would earn 8% annual simple interest. Three months before the CD was due to mature, Bill needed his CD money, so a friend agreed to lend him money and receive the value of the CD when it matured. (a) What is the value of the CD when it matures

Respuesta :

Answer:

value of the CD when it matures is $2120

Explanation:

given data

principal = $2000

rate = 8%

time = 9 month

solution

we get here Future value with help simple interest  that is express as

future value = principal × ( 1+ rate )   ...............1

here annual rate of interest have on 1 year or 12 months

s here rate will be

rate =  [tex]\frac{8}{100}\times \frac{9}{12}[/tex]

rate = [tex]\frac{3}{50}[/tex]

so put value in equation 1 we get

future value = $2000 × ( 1 + [tex]\frac{3}{50}[/tex]  )  

solve it we get

future value = $2120

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