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stefan19367
02.01.2020 •
Mathematics
Sergio has decided to diversify his investments in the following way:
$4,000 in an account earning 3.2% simple interest
$4,000 in a savings account earning 2.1% interest compounded annually
$7,500 in a certificate of deposit earning 5% interest compounded quarterly
how much total interest will sergio earn on his investments at the end of 4 years?
a.
$1,240.82
b.
$2,123.90
c.
$2,497.17
d.
$2,507.90
Solved
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Ответ:
The total interest Sergio earns is $ 2507.90 .
Option (d) is correct .
Step-by-step explanation:
First part
Formula
As given
$4,000 in an account earning 3.2% simple interest for 4 years .
Put all the values in the formula
Simple interest = $512
Thus interest is $512 when invested $4000 in an account earning 3.2% for 4 years .
Second part
Formula
Amount = P + Interest
Where P is the principle , r is the rate of interest in the decimal form and t is the time in years .
As given
$4,000 in a savings account earning 2.1% interest compounded annually for 4 years .
P = $4000
2.1% is written in the decimal form
= 0.021
r = 0.021
t = 4 year
Put all the values in the formula
Amount = $4346.72
Thus
$4346.72 = $4000 + Interest
Interest = $4346.72 - $4000
Interest = $346.72
Thus interest is $346.72 when invested $4,000 in a savings account earning 2.1% for 4 years .
Third part
Formula
Amount = P + Interest
Where P is the principle , r is the rate of interest in the decimal form and t is the time in years .
As given
$7,500 in a certificate of deposit earning 5% interest compounded quarterly .
P = $7500
5% is written in the decimal form
= 0.05
r = 0.05
t = 4 years
Put all the values in the formula
Amount = $9149.175
$9149.175 = $7500 + Interest
Interest = $9149.175 - $7500
Interest = $1649.175
Thus interest is $1649.175 when invested $7,500 in a certificate of deposit earning 5% for 4 years .
Thus
Total interest Sergio earns = Interest from simple interest + Interest from compounded annually + Interest from compounded quarterly .
Put all the value in the above
Total interest Sergio earns = $512 + $346.72 + $1649.175
= $ 2507.90 (Approx)
Therefore the total interest Sergio earns is $ 2507.90 .
Option (d) is correct .
Ответ:
Step-by-step explanation:
I believe it is b