Suppose you buy a two-year CD for $10,000 from First Command Bank.
The interest earned at maturity is $______.
Use the APY (Annual Percentage Yield) from Table 4.1.
The Table says APY for this is 3.9%
To calculate the interest earned at maturity on a two-year CD (Certificate of Deposit), we need to use the formula:
Interest = Principal x Rate x Time
Where:
Principal = $10,000 (the initial investment)
Rate = APY (Annual Percentage Yield) from Table 4.1 (3.9% in this case)
Time = 2 years
Let's calculate the interest earned at maturity:
Interest = $10,000 x 0.039 x 2
Interest = $7,800
Therefore, the interest earned at maturity on the two-year CD is $7,800.
To calculate the interest earned at maturity, you need to use the formula:
Interest = Principal x (APY/100)
Given that you bought a two-year CD with a principal of $10,000 and an APY of 3.9%, you can plug these values into the formula:
Interest = $10,000 x (3.9/100)
Calculating the expression:
Interest = $10,000 x 0.039
Simplifying:
Interest = $390
Therefore, the interest earned at maturity would be $390.
PRT = I
10,000 * 0.039 * 2 = ?