Multiple choice

Emily has decided to invest her monthly savings of $10,800 in two different types of assets. She allocates 30% of her savings to Asset A, which yields an annual return of 4%. She invests the remaining amount in Asset B, which offers an annual return of 7%. After one year, what is the total interest earned from both the investments?

  1. $568.80
  2. $586.80
  3. $658.80
  4. $856.80
  5. $865.80
Reveal answer Fill a bubble to check yourself
C Correct answer
AI explanation

Emily allocates 30% of her \$10,800 savings to Asset A, which equals \$3,240, leaving \$7,560 for Asset B. Using the simple interest formula of Principal multiplied by Rate, the interest from Asset A is 3240 multiplied by 0.04, which equals \$129.60. The interest from Asset B is 7560 multiplied by 0.07, which equals \$529.20. Adding both interests gives the total interest earned: 129.60 plus 529.20 equals \$658.80.