Lisa is depositing $1,600 in a six-month CD that pays 2.83% interest. How much interest will she accrue if she holds the CD until maturity? (Round to the nearest cent)
Lisa is depositing $1,600 in a six-month CD that pays 2.83% interest. How much interest will she accrue if she holds the CD until maturity? (Round to the nearest cent)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Lisa is depositing $1,600 in a six-month CD that pays 2.83% interest. How much interest will she accrue if she holds the CD until maturity? (Round to the nearest cent)
Expert Solution
Introduction
A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When a person cashes in or redeems his CD, he receives the money that he originally invested plus any interest.
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