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18 April, 12:41

A certificate of deposit often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the amount for early withdrawal on a CD paying 5 percent and valued at $24,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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  1. 18 April, 13:43
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    The amount for early withdrawal is $204

    Step-by-step explanation:

    Annual interest rate = 5% = 0.05

    Investment = $24,000

    Annual interest rate * Investment = Annual interest

    0.05 * $24,000 = $1,200

    Penalty = Two months of interest

    (months/months in a year) * Annual interest

    (2/12) * $1,200 = 0,17

    0,17 * $1,200 = $204,00
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