Answer:
$5,500 was invested in the insured bond fund
Step-by-step explanation:
First, let us calculate the interest earned on savings account
Simple interest = principal × rate × time
where:
principal = $2,200
rate = 2.5% = 2.5/100 = 0.025
time = 1 year
∴ simple interest = 2200 × 0.025 × 1 = $55
Total annual interest earned = interest earned from savings account + interests earned on insured bond fund = $308
∴ 308 = 55 + interests earned on insured bond fund
∴ interests earned on insured bond fund = 308 - 55 = $253
Finally, we know the simple interest earned on insured bond fund, the amount invested (principal) is calculated as follows:
simple interest = principal × rate × time
where:
simple interest = $253
rate = 4.6% = 0.046
time = 1 year
∴ 253 = principal × 0.046 × 1
253 = principal × 0.046
∴principal = 253 ÷ 0.046 = 5500
Therefore $5,500 was invested in the insured bond fund
