After 3 years, remington earned $390 in simple interest from a cd into which he initially deposited $4,000. what was the annual interest rate of the cd?

a. 3.25%
b. 6.5%
c. 13%
d. 9.75%

The formula used for this problem would be

F = P (1+i)^n, where F is the future worth, P is the present worth, i is the annual interest and n is the number of years. Substituting the known values, we could determine i.

$390 + $4000 = $4000 (1+i)^3
(1+i)^3 = $4390/$4000
(1+i) = cube root (1.0975)
1+i = 1.0315
i = 1.0315 - 1
i = 0.0315 * 100
i = 3.15%

The correct answer is 3.15%, From the choices, the nearest would be letter A.