Question

hi guys this is austin, sammi's sis and I need help on a ques.

Would you make more interest by investing $4,500 in a 6-month certificate of deposit (CD) at 6% interest or by investing $3,500 in a 12-month CD at 4% interest?

Answer 1

Without more information I would assume this is simple interest.
I = Prt
P is the initial investment (4,500 or 3,500)
r is the annual interest rate (6% or 4%)
t is number of years (1/2 or 1 for 6 and 12 months)

So solve the two equations. Whichever has a higher solution is your answer.

Answer 2

I missed that this is asking which has a higher interest gained. When you solve the Prt equation, then subtract what was put in, that would tell you what the interest alone was.

Answer 3

ok I will and I will show you what I did and can you tell me if I did it right?

Answer 4

Sure.

Answer 5

this is what I put
First section:

I = prt

I = 4,500*6%*1/2

I = 4,500*0.06*0.5

I = 270*1/2

I = 270*0.5

I = 135
----------------------
Second section:

I = prt

I = 3,500*4%*1

I = 3,500*0.04*1

I = 140*1

I = 140
----------------------------

So if you invest $3,500 in a 12-month CD at 4% interest is will have more interest than investing $4,500 in a 6-month (CD) at 6%.

Answer 6

With the information given, I would say yes, you are right.

Answer 7

Thanks and yes he got it right.

Answer 8

haha silly