Question

Belinda finds a CD with 2.8% APR compounded annually. How much money will Belinda invest in this CD if she wants to have a yearly income of $35,000

Answer 1

Belinda will need to use the simple compounding formula to get the yearly income of $3500.
Present amount = Future amount /(1+interest)^payments
where
Future amount = $35000
interest = 2.8%
payments = 1
Subsitute all the given values, we will get the present amount
Present amount of CD = $34,046.7