Colton sold a motorcycle for $21,000. He placed half of the money into a CD 1 with a 4.5% interest rate compounded daily. He placed the other half into a CD 2 with the same interest rate but compounded monthly. 

Ending Balance of CD 1 (compounded daily) = 

$13,149.20

Ending Balance of CD 2 (compounded monthly) = 

$13,143.85

What is the difference in the interest earned on each amount after 5 years?

To determine the difference in the interest earned between the two CDs, we need to follow these steps:

1. Calculate the initial principal amount placed into each CD.
2. Subtract the initial principal from the ending balance to find the interest earned for each CD.
3. Find the difference in the interest earned between the two CDs.

### Step 1: Calculate the Initial Principal

Since Colton placed half of the $21,000 into each CD:
\[
\text{Principal for each CD} = \frac{21,000}{2} = 10,500 \text{ dollars}
\]

### Step 2: Calculate the Interest Earned

For each CD:
- **Interest Earned on CD 1 (compounded daily)**:
  \[
  \text{Interest on CD 1} = \text{Ending Balance of CD 1} - \text{Principal}
  \]
  \[
  = 13,149.20 - 10,500 = 2,649.20 \text{ dollars}
  \]

- **Interest Earned on CD 2 (compounded monthly)**:
  \[
  \text{Interest on CD 2} = \text{Ending Balance of CD 2} - \text{Principal}
  \]
  \[
  = 13,143.85 - 10,500 = 2,643.85 \text{ dollars}
  \]

### Step 3: Calculate the Difference in Interest Earned

\[
\text{Difference in Interest} = \text{Interest on CD 1} - \text{Interest on CD 2}
\]
\[
= 2,649.20 - 2,643.85 = 5.35 \text{ dollars}
\]

So, the difference in the interest earned between CD 1 and CD 2 after 5 years is **$5.35**.

Would you like further details on these calculations or have any other questions?

Here are 5 related questions to explore further:

1. How would the interest earned change if the interest rate was 5% instead of 4.5%?
2. What would be the difference in interest if the principal was $15,000 instead of $10,500?
3. How does the compounding frequency (daily vs. monthly) affect the interest earned over time?
4. What would be the ending balance if both CDs were compounded annually instead?
5. How long would it take for each CD to reach $15,000 with the same interest rates?

**Tip:** The difference in interest between different compounding methods typically increases with the length of time the money is invested.

Learn how to calculate the difference in interest earned between two CDs with different compounding frequencies using a detailed example. This problem covers compound interest concepts and calculations with daily and monthly compounding frequencies over a 5-year period. Suitable for high school students.

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