After 3 years, Remington earned $390 in simple interest from a CD into which he initially deposited $4000. What was the annual interest rate of the CD?

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.

R=I/pt

R = (390: (4,000*3)) * 100

R=3.25%