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29 December, 18:41

Manuela wants to have $26,000 in 18 months. About how much should she put into an 18 month CD that earns simple interest of 5.6% a year calculated semiannually in order to reach her goal.

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  1. 29 December, 21:46
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    Since it is simple interest, in 18 months it will earn 1.5*5.6 = 8.4%,

    x + 0.084x = 26000

    x = 2600/1.084 = $23,985.24
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