We have been given that Carla plans to invest $9,000 for 10 years. Better Bank offers a 10 year CD at an annual rate of 4% using simple interest. We are asked to find the amount after 10 years.
We will use simple interest formula to solve our given problem.
[tex]A=P(1+rt)[/tex], where
A = Final amount,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
[tex]4\%=\frac{4}{100}=0.04[/tex]
[tex]A=\$9000(1+0.04\times 10)[/tex]
[tex]A=\$9000(1+0.4)[/tex]
[tex]A=\$9000(1.4)[/tex]
[tex]A=\$12600[/tex]
Therefore, the investment will be worth $12600 in 10 years. and option C is the correct choice.
