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E

Jones invests 100,000 in a 180-day short term certificate of deposit(CD) at a bank, based on simple interest at an annual rate 6.5%. After 120 days, the annual simple interest rates have risen to 9%. (A) Jones would like to redeem the CD early for a fee of $300 and then reinvest the remaining funds for 60 days at the new interest rate. What would be the accumulated amount at the end of the 60 days? (B) What early redemption fee should the bank charge so that there is no advantage for Jones to redeem the CD and reinvest at the new interest rate