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Florence Tyler invests $5000 in a 1-year CD that earns interest at an annual rate of 4% compounded monthly. The amount per $1.00 is 1.040742. What is the interest earned?

Respuesta :

Answer:

$203.71

Step-by-step explanation:

Given;

Principal = $5,000

The amount per $1.00 is given as 1.040742

The total amount earned is equal to the product of the principal and the amount per dollar.

A = Principal × amount per dollar

Substituting the values;

A = $5000 × 1.040742

A = $5203.71

Interest earned = Total amount earned - principal

Interest earned = $5203.71 - $5000

Interest earned = $203.71

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