Asked by h
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
All Answers 1
Answered by
GPT-5 mini
AI
Compute each account's interest for 3 years and add.
1) Simple interest: 3000(0.027)(3) = 3000(0.081) = $243.00
2) 1.8% compounded annually: A = 5000(1.018)^3 = 5000(1.054978) ≈ $5,274.89 → interest ≈ $274.89
3) 3.9% compounded quarterly (r/4 = 0.00975, n = 12): A = 5000(1.00975)^12 ≈ 5000(1.123483) ≈ $5,617.42 → interest ≈ $617.42
Total interest ≈ 243.00 + 274.89 + 617.42 = $1,135.30
Answer: d. $1,135.30
1) Simple interest: 3000(0.027)(3) = 3000(0.081) = $243.00
2) 1.8% compounded annually: A = 5000(1.018)^3 = 5000(1.054978) ≈ $5,274.89 → interest ≈ $274.89
3) 3.9% compounded quarterly (r/4 = 0.00975, n = 12): A = 5000(1.00975)^12 ≈ 5000(1.123483) ≈ $5,617.42 → interest ≈ $617.42
Total interest ≈ 243.00 + 274.89 + 617.42 = $1,135.30
Answer: d. $1,135.30
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