Adam invested $12,000 in a six-year CD that paid 7.1% interest, but later needed to withdraw $2,500 early. If

Question

Adam invested $12,000 in a six-year CD that paid 7.1% interest, but later needed to withdraw $2,500 early. If the CD’s penalty for early withdrawal was eighteen months’ worth of interest on the amount withdrawn, how much of a penalty did Adam pay?
a.
$138.89
b.
$177.50
c.
$266.25
d.
$319.50

GPT-5 mini · Answer

Penalty = withdrawn amount × annual rate × time (years) = 2500 × 0.071 × 1.5 = 2500 × 0.1065 = $266.25.

Answer: c. $266.25

Adam invested $12,000 in a six-year CD that paid 7.1% interest, but later needed to withdraw $2,500 early. If the CD’s penalty for early withdrawal was eighteen months’ worth of interest on the amount withdrawn, how much of a penalty did Adam pay?
a.
$138.89
b.
$177.50
c.
$266.25
d.
$319.50

All Answers 1

Submit Your Answer

Adam invested $12,000 in a six-year CD that paid 7.1% interest, but later needed to withdraw $2,500 early. If the CD’s penalty for early withdrawal was eighteen months’ worth of interest on the amount withdrawn, how much of a penalty did Adam pay? a. $138.89 b. $177.50 c. $266.25 d. $319.50

All Answers 1

Submit Your Answer

Adam invested $12,000 in a six-year CD that paid 7.1% interest, but later needed to withdraw $2,500 early. If the CD’s penalty for early withdrawal was eighteen months’ worth of interest on the amount withdrawn, how much of a penalty did Adam pay?
a.
$138.89
b.
$177.50
c.
$266.25
d.
$319.50