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.

Answer 1

To find the value of Li's CD after one year, we need to calculate the interest earned on the initial investment of $250.

Interest = Initial Investment * Interest Rate

Interest = $250 * 2.6% = $250 * 0.026 = $6.50

The value of Li's CD after one year will be the initial investment plus the interest earned.

Value after one year = Initial Investment + Interest = $250 + $6.50 = $256.50

Therefore, the value of Li's CD after one year will be $256.50.