Cameron has decided to diversify his investments in the following way: $3,000 in an account earning 2. 7% simple interest $5,000 in a savings account earning 1. 8% interest compounded annually $5,000 in a certificate of deposit earning 3. 9% interest compounded quarterly How much total interest will Cameron earn on his investments at the end of 3 years? a. $530. 87 b. $665. 57 c. $973. 30 d. $1,135. 30 Please select the best answer from the choices provided A B C D.

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pstnonsonjoku pstnonsonjoku · Answer 1 · 2022-02-18T13:40:33+01:00

His total interest after three years is $1,135. 30.

Interest refers to money that is received in an investment or a loan. It is always a percentage of the principal sum.

For the first investment;

I = PRT/100 = $3,000 × 2.7 × 3/100 = $243

For the second investment;

A = P(1 + r/n)^nt

A = 5000(1 + 0.018)^3

A = $5275

I = $5275 - $5000 = $275

For the third investment

A = 5,000(1 + 0.00975)^(4 × 3)

A = $5617

I = $5617 - $5,000 = $617

Total interest = $617 + $275 + $243 = $1,135. 30

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