Explanation Given: The cost of certificate of deposit (CD) is $ 500 and at the end of the two year its cost is $ 561.80 . Formula used: The future value F is given by, F = P ( 1 + r ) T Where P the principal amount invested, r is the periodic interest rate and T is the time for which investment is done. Calculation: From the given information, P = $ 500 F = $ 561.80 And T = 2 The future value F is given by, F = P ( 1 + r ) T Substituting the values of $ 500 for P , $ 561.80 for F and 2 for T in the equation above.

Excursions in Mathematics, Loose-Leaf Edition Plus MyLab Math with Pearson eText -- 18 Week Access Card Package

9th Edition

ISBN: 9780136208754

Author: Tannenbaum, Peter

Publisher: PEARSON

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Chapter 10, Problem 70E

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The annual yield of the investment.

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Chapter 10, Problem 69E

Chapter 10, Problem 71E

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Excursions in Mathematics, Loose-Leaf Edition Plus MyLab Math with Pearson eText -- 18 Week Access Card Package

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The annual yield of the investment.

Solution Summary: The author explains how the annual yield of the investment is 6%.

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To find:

The annual yield of the investment.