Question

A bank offers a CD that pays a simple interest rate of 10.5​%. How much must you put in this CD now in order to have ​$1500 for a​ home-entertainment center in 2 years.

Answer 1

Answer:

Required amount is $1239.669

Step-by-step explanation: Let P be the required amount. Given that

P + SI = 1500 .... (i)

We know that simple interest

$SI=\frac{PRT}{100}$.

Given R = 10.5, T = 2. So,

$SI=\frac{P\times 10.5\times 2}{100}=\frac{21P}{100}$

Put in equation (i) we get

$P+\frac{21P}{100}=1500$

$\frac{121P}{100}=1500$

$P=\frac{1500\times 100}{121}=\ 1239.669$