A simple interest certificate of deposit (CD) offers a fixed interest rate of 3% annually. If you invest $10,000 for 2 years, what will be the total interest earned? Simple interest formula: I=P⋅r⋅t
Answer
A
900 dollars
B
300 dollars
C
1 dollars comma 200
D
600 dollars
Explanation
Use the simple interest formula I = P × r × t. Substituting the values gives I = $10,000 × 0.03 × 2 = $600, so the total interest earned is 600 dollars.
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