Tony invested $5,500 in a four-year CD that paid 4.8% interest, but later needed to withdraw $475 early. If the CD’s penalty for early withdrawal was three months’ worth of interest on the amount withdrawn, how much of a penalty did Tony pay?
The formula is I=prt I penalty paid ? P the amount of early withdrawn 475 R interest rate 0.048 T time 3/12 So the CD’s penalty for early withdrawal is I=475×0.048×(3÷12) I=5.7
