The total interest earned at the end of first year is $250 and the percentage of interest for his total investment is 6.25%.
Given, Chau invested his money by purchasing the following:
a certificate of deposit for $1000 at the rate of 2% per year, and
corporate bonds for $3000 at the rate of 7% per year.
we know that simple interest is calculated by multiplying the amount invested P by the interest rate r times the number of years invested t.
therefore, I = P × r × t
a. The first investment has a principal of P = $1,000, r = 2% = 0.02, t = 1 yr
I₁ = 2000 × 0.04 × 1
I₁ = 40
The second investment has a principal P = $3,000, interest rate r = 7% = 0.07 and time t = 1yr
I₂ = 3000 × 0.07 × 1
I₂ = 210
Therefore, total interest = I₁ ₊ I₂
= 40 ₊ 210
= $250
b. The overall rate of interest can be found by dividing:
Total interest/Total amount invested × 100
= 250/(1000 ₊ 3000) × 100
= 250/4000 × 100
= 25/4
= 6.25%
Hence we get the total interest earned at the end of first year as $250 and its overall rate of interest as 6.25%
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Your question was incomplete. Please find the missing content here.
Last year, Chau invested his money in two purchases. He purchased a certificate of deposit for $1000 that paid 2% interest per year and purchased $3000 in corporate bonds paying 7% interest per year.
(a) What was the total investment earned at the end of 1 year?
(b) What was the percentage interest for her total investment?
