Question

Your fixed expenses are $1,328.90/month and you saved 4 months' worth in an emergency fund. You place half in a 45-day CD at a 4.5% APR and the remainder in a regular savings account at a 3.2% APR. How much total interest do you earn in 45 days?

Answer 1

You saved 4 months
1,328.9×4
=5,315.6
half in each account
5,315.6÷2
=2,657.8
CD interest
2,657.8×0.045×(45÷365)
=14.75
Saving account
2,657.8×0.032×(45÷365)
=10.49

14.95 + 10.63 = $25.58 total interest earned

Hope it helps

Answer 2

Answer:

$25.22

Step-by-step explanation:

We are given that Your fixed expenses are $1,328.90/month and you saved 4 months' worth in an emergency fund.

So, you saved in 4 months = $1328.90 \times 4$

                                            = $5315.6$

You place half in a 45-day CD at a 4.5% APR

Thus you place amount in a 45-day CD at a 4.5% APR =$\frac{5315.90}{2}=2657.95$

So, To calculate Simple interest at rate of 4.5 % we will use formula :

$SI= P\times R\times T$

P = Principal = 2657.95

R = rate of interest in decimal = 4.5% =0.045

T = Time in years = 45/365

Substitute the values in the formula :

$SI= 2657.95 \times 0.045 \times \frac{45}{365}$

$SI= 14.74$

Now the remainder in a regular savings account at a 3.2% APR.

Now the rate of rate of interest for other half is 3.2 %

P = Principal = 2657.95

R = rate of interest in decimal = 3.2% =0.032

T = Time in years = 45/365

Substitute the values in the formula :

$SI= 2657.95 \times 0.032 \times \frac{45}{365}$

$SI= 10.48$

Thus the total interest = 14.74+10.48= 25.22

Hence you earn $25.22 as interest in 45 days.