sergio has decided to diversify his investments in the following way:$4,000 in an account earning 3.2% simple interest$4,000 in a savings account earning 2.1% interest compounded annually$7,500 in a certificate of deposit earning 5% interest compounded quarterlyhow much total interest will sergio earn on his investments at the end of 4 years?

The formula for compound interest is : A = P(1+r/n)^nt

A = 4000 (1+0.021/4)^4x4

A = 4000 (1.021)^16

A = 5,577.91

Sergio's total interest would be : 5,577.91 - 4,000 = $ 1,577.91

hope this helps

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JeanaShupp JeanaShupp · Answer 2 · 2019-08-27T23:31:02-04:00

Answer: $1,208.28

Step-by-step explanation:

Formula we use here :-

Simple interest : @@MATH_TOKEN_0@@

Compound amount : @@MATH_TOKEN_1@@

Compound amount(Compounded quarterly):- @@MATH_TOKEN_2@@

where P is the principal amount , r is the rate of interest( in decimal) and t is the time.

1) $4,000 in an account earning 3.2% simple interest

Simple interest : $4000\times0.032\times4=\$512$

2) $4,000 in a savings account earning 2.1% interest compounded annually

Compound Amount :- @@MATH_TOKEN_4@@

Compound interest : @@MATH_TOKEN_5@@

3) $7,500 in a certificate of deposit earning 5% interest compounded quarterly

Compound Amount :- $A=4000(1+\dfrac{0.021}{4})^{4\times4}\approx\$4349.56$

Compound interest : $A-P=\$4349.56-\$4000=\$349.55$

Now, the total interest : $\$512+\$346.73+\$349.55=\$1208.28$

Hence, the total interest will sergio earn on his investments at the end of 4 years = $1,208.28