Interest rate in 2,000 dollars for CD and in A Savings account

Question

Sam invests 2000 in a CD or a savings account. For 3 months he wants to know which world give better interest rate. The interest for 1 month is 2,004.20 2 months is 2,008.41. 3 months interest is 2,012.62. What is the interest for 3 months and which is best CD or Savings account?

Answer 1

Hi, your question seems incomplete to me. The interest rates you give are only for either the CD or the savings account, and the question does not indicate which one. You would need both sets of data, one for the CD and one for the savings account. The interest for 3rd month that you give is $2012.62-2008.41.= $4.21. But I don't know whether that is for the CD or the savings account. You would need the other set of data to calculate the 3rd month - 2nd month to arrive at the answer x.xx, and then compare the two numbers to see which is higher. The higher interest amount is better and that would correspond to the investment type, either the CD or the savings account.