Question

Jerome deposits $3,700 in a certificate of deposit (CD) that pays 1.8% interest, compounded annually. How much interest does Jerome earn in 1 year? Round to the nearest cent

Answer 1

The given interest is, r=1.8%=0.018

The prinicipal amount is p=3700

The time interval is, t=1

The formula to calculate the interest is,

$I=\text{prt}$

Therefore, the interest is,

$I=3700\times0.018\times1=66.6$