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Determine the interest earned by alpha

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Alpha Ltd deposits $500 000 cash with the State Bank on 1 July 2016 for three months, i.e. 92 days, until 30 September 2016. The bank prepares a Certificate of Deposit (CD) for Alpha Ltd, which earns an interest of 6% per annum. On 31 August 2016 the company needs cash urgently, and successfully negotiates with the bank to sell the CD in the money market when the interest rate is 5.5% per annum. Determine the interest earned by Alpha Ltd between 1 July 2016 and 31 August 2016.

Reference no: EM131317235

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