The table below shows the future value of a certificate of deposit (CD) after x years Eric states the applied interest is simple
interest true or false?
2 answers:
Answer:
Option B.
Step-by-step explanation:
Eric states the applied interest is simple interest. We need to check whether the this statement is true or false.
In simple interest, the amount of deposit increased at a constant rate. It means the difference between future values of any two consecutive years will same.
Difference between future values of first two years.
Difference between future values of 2nd and 3rd year is
Since d₁≠d₂, therefore, the given statement is false.
Thus, the correct option is B.
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