A 180-day GIC pays interest at six and a half percent.How much interest will you earn on $5000 if you hold it to maturity?

Question

Quizplus · Accepted Answer

To calculate the interest earned, we need to use the formula:

Interest = Principal x Rate x Time

Here, the principal is $5000, the rate is 6.5% per annum (or 0.065 in decimal form) and the time is 180 days (or 0.5 years).

So, the interest earned is:

Interest = $5000 x 0.065 x 0.5 = $162.50

Therefore, the correct answer is B) $160.27 (rounded to the nearest cent).

A 180-Day GIC Pays Interest at Six and a Half