Financial Formula

Question

2. How much interest does a CD with 3.25 % annual simple interest earn after 30 months if the account
originally contains $10, 000?

Answer 1

Use formula found in your class material.

Answer 2

The underlying formula that you want to use here is

Interest = Principal x Rate x Time

Interest = $10,000 x 0.0325 x (30 months / 12 months/year))

Interest = $812.50