alyea231
27.06.2019 •
Mathematics
Orlando invested $16,000 in an eight-year cd bearing 6.5% simple annual interest, but needed to withdraw $3,500 after five years. if the cd’s penalty for early withdrawal was one year’s worth of interest on the amount withdrawn, when the cd reached maturity, how much less money did orlando earn total than if he had not made his early withdrawal? a. $227.50 b. $682.50 c. $910.00 d. $455.00
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Ответ:
Therefore, the correct option is OPTION C.
Step-by-step explanation:
If Orlando had not made his early withdrawal, the amount of money he would have earned is:
F = 0.065($16,000)(8) = $8.320
Given that he withdraw $3500, he now earns:
F1 = (0.065)($16,000)(5) + ($12,500)(0.065)(3)
F1 = $5200 + $2437.5 = $7637.5
And now we have to take into acount the year of penalty, which is one year’s worth of interest on the amount withdrawn.
Penalty= $3500(0.065)(1) = $227.5
So the total money he earns now is: $7637.5 - $227.5 = $7410
Then, the amunt of money he could have earn but he didn't is:
Money = $8.320 - $7410 = $910
Therefore, the correct option is OPTION C.
Ответ: