If Carla plans to invest $9,000 for 10 years and Better Bank offers a 10 year CD at an annual rate of 4% using simple interest. then investment will be worth $12600 .
What is simple interest?
Simple interest is based on the principal amount of a loan or the first deposit in a savings account.
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 know
A= PRT+ P =P(RT+1)
Where
A = Final amount,
P = Principal amount=9000
R = Annual interest rate in decimal form=0.04
t = Time in years=10
Final amount can be calculated as
[tex]&A=\$ 9000(1+0.04 \times 10) \\\\&A=\$ 9000(1+0.4) \\\\&A=\$ 9000(1.4) \\\\&A=\$ 12600\\[/tex]
If Carla plans to invest $9,000 for 10 years and Better Bank offers a 10 year CD at an annual rate of 4% using simple interest. then investment will be worth $12600 .
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