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Tony invested $5,500 in a four-year CD that paid 4.8% interest, but later needed to withdraw $475 early. If the CD’s penalty for early withdrawal was three months’ worth of interest on the amount withdrawn, how much of a penalty did Tony pay?

Question

supie · Answer

So do you know what the formula is?

supie · Answer

Using the formula, you have to plug in the numbers, then do the math.

Hoodmemes · Answer

Ok as we can see it already states "Tony invested $5,500", "paid 4.8% interest" " needed to withdraw $475"  "penalty for early withdrawal was three months"

Lets solve for the " "paid 4.8% interest" with the " needed to withdraw $475"  first.

$$4.8\div100=0.048$$

Multiply the paid interest by the needed withdraw fee.

$$0.048\times475=22.8$$

(22.8) can also be written as (22.80)

$$3\div12=0.25$$

Multiply the  "penalty for early withdrawal was three months" which is now (0.25) by the already multiplied "paid interest and needed withdraw fee." which is  (22.80).

$$0.25\times22.80=5.7$$

(5.7) can also be written as (5.70)

Tony paid a 5.70 penalty.