To find the value of Li's CD after one year, we need to calculate the interest earned on the initial deposit of $250.
To calculate the interest earned, we multiply the initial deposit ($250) by the annual interest rate (2.6%) expressed as a decimal:
Interest Earned = Initial Deposit * Annual Interest Rate
= $250 * 0.026
= $6.50
Therefore, Li's CD will be worth the initial deposit ($250) plus the interest earned ($6.50) after one year:
Value of CD after one year = Initial Deposit + Interest Earned
= $250 + $6.50
= $256.50
So, the value of Li's CD after one year will be $256.50.
After saving $250, Li invests in a certificate of deposit (CD) that pays 2.6% annual
interest. What will be the value of Li's CD after she has had it for one year? Show
your work.
1 answer
1 answer