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Simple annual interest

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At Charter One Bank, they are offering a 2 year CD at 4% compounded annually.
Now the bank offers a three year CD at 5% (simple, annual interest). If you decide to invest the money there, how much would you have after three years? If a day at SpaMadnesscosts $3000,will you get your day of leisure in three years?

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The solution discusses simple annual interest rates.

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I think this is in contibuation of earlier questions
1. You played the lottery numbers 245 straight and boxed, and won $2311.40. You want to go on vacation to the ...

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