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

value of the CD when it matures is $2120

Explanation:

given data

principal = $2000

rate = 8%

time = 9 month

solution

we get here Future value with help simple interest  that is express as

future value = principal × ( 1+ rate )   ...............1

here annual rate of interest have on 1 year or 12 months

s here rate will be

rate =  

rate =

so put value in equation 1 we get

future value = $2000 × ( 1 +  )  

solve it we get

future value = $2120