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After 3 years, Remington earned $390 in simple interest from a CD into which he initially deposited $4,000. What was the annual interest rate of the CD?

A3.25%
B6.5%
C13%
D9.75%

Verified Answer :

MissPhiladelphia

The formula used for this problem would be

F = P (1+i)^n, where F is the future worth, P is the present worth, i is the annual interest and n is the number of years. Substituting the known values, we could determine i.

$390 + $4000 = $4000 (1+i)^3
(1+i)^3 = $4390/$4000
(1+i) = cube root (1.0975)
1+i = 1.0315
i = 1.0315 - 1
i = 0.0315 * 100
i = 3.15%

The correct answer is 3.15%, From the choices, the nearest would be letter A.

kylemwhite16

Answer:

A is correct here

Step-by-step explanation:

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