To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $30,000 at 9% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? The compound interest rate that would yield the same amount of money in 3 years is [ % per year.

To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $30,000 at 9% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? The compound interest rate that would yield the same amount of money in 3 years is [ % per year.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.1: Why Save?

Problem 6R

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