Question: Recently, a certain bank offered six-month CDs at 8.0% compounded monthly. (Round your answers to two decimal places.) (a) Find the annual yield of one

Recently, a certain bank offered six-month CDs at 8.0% compounded monthly. (Round your answers to two decimal places.)

(a) Find the annual yield of one of these CDs. %

(b) How much would a $1,000CD be worth at maturity?

(d) What percent of the original $1,000 is this interest? %

(e) The answer to part (d) is not the same as that of part (a). Why? MULTIPLE CHOICE ANSWER: Part (a) is for 6 months; part (d) is for a year. Part (a) is for a year; part (d) is for 6 months.

(f) The answer to part (d) is close to, but not exactly half, that of part (a). Why? MULTIPLE ANSWER CHOICE: You earn interest on interest; that is compounding means. OR the annual yield does not take into account the initial investment.

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