Question

A six-month, 180-day CD offers an annualized interest rate of 1.10% and requires a minimum deposit of $25,000. What is the amount of interest that will be earned on this investment?

Answer 1

Answer:

$135.63

Explanation:

Data provided in the question:

Time = 180 days

Time in years = 180 ÷ 365 = 0.4932 years

Amount deposited = $25,000

Annual Interest rate = 1.10% = 0.011

Now,

Interest = Amount deposited × Rate × Time

or

Interest = $25,000 × 0.011 × 0.4932

or

Interest = $135.63

Hence,

The amount of interest earned is $135.63