Kerry Stutsman has $500 in a saving account earning .45% interest. She is considering buying a 1-year certificate of deposit (CD) that pays 3.25% interest. What will be the annual difference in her interest earnings between the savings account and the CD?

Answer 1

Multiply: $500.00 x .0045 = $2.25

Remember to move the decimal two places.

$500.00 x .0325 = $16.25

Then subtract $16.25 - 2.25 = $14.00
The annual difference will be $14.00