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Question

Bill Casler bought a $\$ 2000$, $9$-month certificate of deposit ($\mathrm{CD}$) that would earn $8 \%$ annual simple interest. Three months before the $\mathrm{CD}$ was due to mature, Bill needed his $\mathrm{CD}$ money, so a friend agreed to lend him money and receive the value of the $\mathrm{CD}$ when it matured.

(a) What is the value of the $\mathrm{CD}$ when it matures?

(b) If their agreement allowed the friend to earn a $10 \%$ annual simple interest return on his loan to Bill, how much did Bill receive from his friend?

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

Step 1

1 of 10In this exercise, the task is to determine the future value of the CD and the case when the friend earns a $10\%$ annual simple interest considering the given input data.

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