Question

Last year, Lamar deposited $12,000 into an account that paid 6% interest per year and $4,000 into an account that paid 5% interest per year. No withdrawals were made from the accounts. What was the total interest earned at the end of 1 year? What was the percent interest for the total deposited?

Answer 1

$920

5.75%

Explanation:

interest earned on deposit can be determined by determining the simple interest

Simple interest = principal x time x interest rate

principal = the amount deposited

Time = the duration of the deposit

interest rate = the percentage on deposit that would be earned

$12,000 x 0.06 x 1 = $720

$4000 x 0.05 = $200

Total = $720 + $200 = $920

Percentage interest for the total deposit = (total interest earned / total amount deposited ) x 100

total amount deposited = $12,000 + $4,000 = $16,000

($920/$16,000) x 100 = 5.75%