A bank offers a Certificate of Deposit (CD) at a 10% simple interest rate for 8 years. If an investor deposits $1,150.00 into the CD and does not make additional deposits, how much interest will be earned by the end of 8 years? Round to the nearest dollar.(1 point)

Question

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Answer 1

To calculate the simple interest earned on a Certificate of Deposit (CD), you can use the formula for simple interest:

\[ \text{Interest} = P \times r \times t \]

where:

• \( P \) is the principal amount (the initial deposit),
• \( r \) is the annual interest rate (expressed as a decimal),
• \( t \) is the time in years.

Given:

• \( P = 1,150.00 \) dollars,
• \( r = 10% = 0.10 \),
• \( t = 8 \) years.

Substituting the values into the formula:

\[ \text{Interest} = 1,150.00 \times 0.10 \times 8 \]

Now, calculate:

\[ \text{Interest} = 1,150.00 \times 0.10 = 115.00 \]

Then:

\[ \text{Interest} = 115.00 \times 8 = 920.00 \]

Thus, the total interest earned by the end of 8 years is

\[ \boxed{920} \] dollars.