To calculate the total interest earned at the end of 1 year, we need to calculate the interest earned from the certificate of deposit and the corporate bonds separately, and then sum them up.
Interest earned from the certificate of deposit:
Principal amount = $2,000
Interest rate = 4%
Interest earned = $2,000 * 4% = $2,000 * 0.04 = $80
Interest earned from the corporate bonds:
Principal amount = $6,000
Interest rate = 9%
Interest earned = $6,000 * 9% = $6,000 * 0.09 = $540
Total interest earned = $80 + $540 = $620
Total investment = $2,000 + $6,000 = $8,000
Percent interest for his total investment:
Percent interest = (Total interest earned / Total investment) * 100
Percent interest = ($620 / $8,000) * 100
Percent interest = 0.0775 * 100 = 7.75%
Therefore, Michael earned a total of $620 in interest at the end of 1 year, and the percent interest for his total investment was 7.75%.
Last year Michael invested his money in two purchases. He purchased a certificate of deposit for $2,000 and paid 4% of interest per year and purchased $6,000 in corporate bonds paying 9% per year. What was the total of interest earned at the end of 1 year? What was the percent interest for his total investment?
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