Explanation:
The formula for calculating the balance on a CD (Certificate of Deposit) after a certain amount of time is:
A = P(1 + r/n)^(nt)
Where: A = the ending balance P = the principal (initial investment) r = the annual interest rate (as a decimal) n = the number of times interest is compounded per year t = the time in years
In this case, the initial investment is $1,800.00, the annual interest rate is 2.3% (or 0.023 as a decimal), and the investment period is 2 years. Assuming that the interest is compounded annually, we can substitute these values into the formula:
A = 1800(1 + 0.023/1)^(1*2) A = 1800(1.046729) A = 1883.12
Rounding to the nearest cent, the ending balance after 2 years on the CD is $1,883.75 (option B). Therefore, option B is the correct answer.