Math Problem Statement

Last year, Nicole invested her money in two purchases. She purchased a certificate of deposit for $2000 that paid 4% interest per year and purchased $6000 in corporate bonds paying 9% interest per year. What was the total interest earned at the end of 1 year? What was the percent interest for her total investment?

Solution

To solve these questions, let's break down the given information and calculate each part step by step.

  1. Investment Details:
    • Certificate of deposit: $2000 at 4% interest per year.
    • Corporate bonds: $6000 at 9% interest per year.

Part (a): Total Interest Earned at the End of 1 Year

Step 1: Calculate the interest earned from the certificate of deposit. Interest=Principal×Rate\text{Interest} = \text{Principal} \times \text{Rate} =2000×0.04=80= 2000 \times 0.04 = 80

Step 2: Calculate the interest earned from the corporate bonds. Interest=6000×0.09=540\text{Interest} = 6000 \times 0.09 = 540

Step 3: Add both interests to find the total interest. Total Interest=80+540=620\text{Total Interest} = 80 + 540 = 620

So, the answer to (a) is: Total Interest=620\text{Total Interest} = 620

Part (b): Percent Interest for Her Total Investment

Step 1: Calculate the total investment. Total Investment=2000+6000=8000\text{Total Investment} = 2000 + 6000 = 8000

Step 2: Calculate the percent interest. Percent Interest=(Total InterestTotal Investment)×100\text{Percent Interest} = \left(\frac{\text{Total Interest}}{\text{Total Investment}}\right) \times 100 =(6208000)×100=7.75= \left(\frac{620}{8000}\right) \times 100 = 7.75

So, the answer to (b) is: Percent Interest=7.75%\text{Percent Interest} = 7.75\%


Would you like further details or have any questions?

Related Questions:

  1. How would the total interest change if the corporate bond rate increased to 10%?
  2. What would the total interest be if she had invested $5000 in each option instead?
  3. How can we calculate the percent interest if we only know the interest rates and proportions of investment?
  4. What is the impact of compounding interest on the total interest earned over one year?
  5. How would the results differ if Nicole invested only in one option with the total amount?

Tip: For percentage calculations, remember that dividing the interest by the total investment and multiplying by 100 gives you the percent interest rate for any investment scenario.

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Math Problem Analysis

Mathematical Concepts

Simple Interest
Percentage Calculation

Formulas

Interest = Principal × Rate
Percent Interest = (Total Interest / Total Investment) × 100

Theorems

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Suitable Grade Level

Grades 9-12