Question

Kevin invested $8,000 for one year at a simple annual interest rate of 6 percent and invested $10,000 for one year at an annual interest rate of 8 percent compounded semiannually. What is the total amount of interest that Kevin earned on the two investments?A. $880
B. $1,088
C. $1,253
D. $1,280
E. $1,296

Answer 1

Answer:

Total interest =$1296

Step-by-step explanation:

Kevin invested $8,000 for one year at a simple annual interest rate of 6 percent

Simple interest = $\frac{Pnr}{100}$

P=8000, n=1 year  and r=6

interest = $\frac{8000(1)(6)}{100}$

Interest = 480  dollars

$compound \ interest =P(1+\frac{r}{n} )^{nt}-p$

P= 10000, t=1, r=8%=0.08, n=2 for semiannually

$compound \ interest =10000(1+\frac{0.08}{2} )^{2(1)}-10000$

Interest = 10816- 10000=816

Total interest = $480+816=1296$