Question

Fernando invested money in a 5-yr CD (certificate of deposit) that returned the equivalent of 3.3% simple interest. He invested S1000 less in a 18-month CD
that had a 2% simple interest return. If the total amount of interest from these investments was $945.00, determine how much was invested in each CD.

Answer 1

Answer:

Fernando invested $ 5000 on the 5-year CD and $ 4000 on the 18-month CD.

Step-by-step explanation:

Since Fernando invested money in a 5-yr CD (certificate of deposit) that returned the equivalent of 3.3% simple interest, and the invested $ 1000 less in a 18-month CD that had a 2% simple interest return, if the total amount of interest from these investments was $ 945.00, to determine how much was invested in each CD the following calculation must be performed:

3.3 x 5 = 16.5

2 x 1.5 = 3

4000 x 0.165 + 3000 x 0.03 = 750

6000 x 0.165 + 5000 x 0.03 = 1140

5000 x 0.165 + 4000 x 0.03 = 945

Therefore, Fernando invested $ 5000 on the 5-year CD and $ 4000 on the 18-month CD.