If you withdraw part of your money from a certificate of deposit before the date of maturity, you must pay an interest penalty. Suppose you invested $7000 in a one-year certificate of deposit paying 8.6% interest. After 6 months, you decide to withdraw $7000. Your interest penalty is 3 months simple interest on the $7000. What interest penalty do you pay? (Round your answer to two decimal places.) Show your work
To find the interest penalty, we first need to calculate the amount of interest earned on the $7000 investment over the 6 months it was in the certificate of deposit.
Interest earned = Principal x Rate x Time
Interest earned = $7000 x 0.086 x 0.5 (6 months is half a year)
Interest earned = $301
Now, we need to find the interest penalty, which is 3 months simple interest on the $7000.
Interest penalty = Principal x Rate x Time
Interest penalty = $7000 x 0.086 x 0.25 (3 months is a quarter of a year)
Interest penalty = $150.50
Therefore, the interest penalty you would have to pay for withdrawing the $7000 after 6 months is $150.50.
If you withdraw part of your money from a certificate of deposit before the date of maturity, you must pay an interest penalty. Suppose you invested $9000 in a one-year certificate of deposit paying 8.3% interest. After 6 months, you decide to withdraw $9000. Your interest penalty is 3 months simple interest on the $9000. What interest penalty do you pay? (Round your answer to two decimal places.)
To find the interest penalty, we first need to calculate the amount of interest earned on the $9000 investment over the 6 months it was in the certificate of deposit.
Interest earned = Principal x Rate x Time
Interest earned = $9000 x 0.083 x 0.5 (6 months is half a year)
Interest earned = $373.50
Now, we need to find the interest penalty, which is 3 months simple interest on the $9000.
Interest penalty = Principal x Rate x Time
Interest penalty = $9000 x 0.083 x 0.25 (3 months is a quarter of a year)
Interest penalty = $186.75
Therefore, the interest penalty you would have to pay for withdrawing the $9000 after 6 months is $186.75.