The case 1 (a certificate of deposit (CD) ) will earn more interest.
Simple interest is the interest amount for a particular principal amount of money at some rate of interest.
Simple Interest is calculated using the following formula: SI = P × R × T, where P = Principal, R = Rate of Interest, and T = Time period.
Given
Case 1:
Principal p = $500
Time t = 3 years
Rate of interest r = 2%
Based on the given conditions
Simple Interest = [tex]\frac{prt}{100}[/tex]
= [tex]\frac{500(2)(3)}{100}[/tex]
= $30
Case 2:
Principal p = $250
Time t = 2 years
Rate of interest r = 3%
Based on the given conditions
Simple Interest = [tex]\frac{prt}{100}[/tex]
= [tex]\frac{250(3)(2)}{100}[/tex]
= $15
The case 1 CD will earn more interest.
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