Question

Kerry has saved $500 and is wondering how to invest it. She was researching different investment options and found a June 2009 article called “What You Need to Know About CD’s” in Kiplinger’s Personal Finance magazine. She has the $500 in a savings account earning .45% interest. She 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 CD?

Answer 1

hey, are you there?

Answer 2

Yes, I got 16.25 for the CD interest earned but cant figure out the savings account interest earned

Answer 3

yes that is correct. For the savings account, you should be able to figure it out because the same procedure of how you got $16.25 for CD applies for the savings account.

Answer 4

do you know how to do it now?

Answer 5

i come up with 225 but that is wrong

Answer 6

you got the digits right but there's a decimal place in between the 2's so it's $2.25

Answer 7

500 x 0.45/100 = $2.25

Answer 8

because 0.45 is a % percentage and we need to put it into ratio form which is 0.45/100

Answer 9

ok i see what i did wrong. Thank you so much for your help.

Answer 10

no problem linda, medal thanks lol :P

Answer 11

and I hope we can be friends.

Answer 12

Sure