APR is also known as the Annual Percentage rate. The total interest that was earned in these 45 days is equal to $29.27.
What is APR?
APR is also known as the Annual Percentage rate, is the rate of interest that is charged to a principal amount on yearly basis.
As it is given that the emergency funds are four times the expenses, therefore, the savings will be equal,
[tex]\text{Monthly savings}= 4 \times \text{Fixed expenses}[/tex]
[tex]= 4 \times \$1,500.45\\\\= $6,001.80\\[/tex]
Therefore, the savings will be $6,001.8.
Now, half of the saving is invested in a saving account for 45 days, therefore,
[tex]\rm Princical\ amount = \dfrac{\$6,001.8}{2}= \$3,000.9\\\\Rate\ of\ interest\ per\ day = 3.15\%\ APR = \dfrac{0.0315}{365} \\\\\text{Number of days} = 45\ days[/tex]
Interest earned = P× r × t
[tex]= 3,000.9 \times \dfrac{0.0315}{365}\times 45\\\\= \$11.65[/tex]
Further, half of the saving was invested in CD for 45 days, therefore,
[tex]\rm Princical\ amount = \dfrac{\$6,001.8}{2}= \$3,000.9\\\\Rate\ of\ interest\ per\ day = 4.65\%\ APR = \dfrac{0.0465}{365} \\\\\text{Number of days} = 45\ days[/tex]
Interest earned = P× r × t
[tex]= 3,000.9 \times \dfrac{0.0465}{365}\times 45\\\\= \$17.02[/tex]
Thus, the total interest that was earned was the sum of the two of the interest. Therefore,
Total Interest earned in 45 days = $11.65 + $17.62 = $29.27
Hence, the total interest that was earned in these 45 days is equal to $29.27.
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