To calculate the interest earned on a Certificate of Deposit (CD) with a fixed maturity of 2 years, an initial investment of [tex]$910, and an annual interest rate of 3.5%, here are the steps we follow:
1. Identify the given values:
- Initial investment (principal, \(P\)): $[/tex]910
- Annual interest rate ([tex]\(r\)[/tex]): 3.5%, which can be written as 0.035 in decimal form
- Number of years ([tex]\(t\)[/tex]): 2
2. Apply the formula for simple interest:
Simple Interest ([tex]\(I\)[/tex]) is calculated using the formula:
[tex]\[
I = P \times r \times t
\][/tex]
3. Plug the given values into the formula:
[tex]\[
I = 910 \times 0.035 \times 2
\][/tex]
4. Perform the multiplication:
[tex]\[
I = 910 \times 0.035 = 31.85
\][/tex]
[tex]\[
I = 31.85 \times 2 = 63.7
\][/tex]
5. Round to the nearest hundredth (if necessary):
The value obtained, [tex]$63.7, is already to the nearest hundredth.
Therefore, the interest earned on the CD after 2 years is:
\[
\text{Interest} = \$[/tex]63.7
\]
