After 2 years, Deion earned $270 in simple interest from a CD into which he initially deposited $6000. What was the annual interest rate of the CD?

A. 2.25%
B. 3.25%
C. 9.75%
D. 6.5%

Question

After 2 years, Deion earned $270 in simple interest from a CD into which he initially deposited $6000. What was the annual interest rate of the CD?

 		A.	2.25%
 		B.	3.25%
 		C.	9.75%
 		D.	6.5%

anonymous · Answer

@Orion1213

perl · Answer

a CD is a certificate of deposit, its a type of loan to a bank thats supposed to generate more interest than just money in a bank account

perl · Answer

than just money sitting in a bank account*

perl · Answer

in any case, we can use the formula
I = P * R * T

perl · Answer

270 = 6000*R*2

perl · Answer

R = 270/(12000) = .0225 
R = 2.25%