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ID: 3111360 • Letter: #
Question
**Will leave positive feedback if the answer is clear, correct and readable. Please answer FULL question.*
Bill Casler bought a $1000, 9-month certificate of deposit (CD) that would earn 8% annual simple interest. Three months before the CD was due to mature, Bill needed his CD money, so a friend agreed to lend him money and receive the value of the CD when it matured. (a) What is the value of the CD when it matures? $ (b) If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend? (Round your answer to the nearest cent.) $
Explanation / Answer
P=$1000
t = 9 month = 9/12 year
r=8%
I= Interest = P*r*t/100 = 60
a) Mature value of CD = 1000+60 = $1060
b) Let x= ammount friend receive from Bill
r = 10%
t = 3months = 3/12 Year
1060-x = x*10*3/(12*100)
x =$ 1034.14
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