D Question 11 pts
How much interest will you earn on
a two year $6,000 CD that will pay
annual interest of 5%? The first
year's interest will remain in the CD
and also earn interest during the
second year.​


$600 (if not compound interest) read below

Step-by-step explanation:

This question is asking for the amount of interest, not the total including the $6,000 CD, which means the question will be way simpler.

  1. You try to find interest for 2 years.
  2. This is mostly mental work. What is 5% of 6000?
  3. Equation: (5% of 6000)(2)
  4. (300)(2)
  5. $600 in interest.
  6. This depends. Are we trying to find compounded interest? If we were, we would find 5% of 6000, add it to 6000, then add 5% of that sum.
  7. (0.05)(6000)+6000=x, x(0.05)=compounded interest
  8. 300+6000=x, x=6300
  9. 6300(0.05)+6300=compounded interest
  10. 315+6300=compounded interest
  11. 6615=total after compounded interest
  12. 6615-6000=how much in interest is paid
  13. $615 in compounded interest.

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