Last year, Lisa deposited $7000 into an account that paid 11% interest per year and $1000 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?

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Answer 1 · 2016-12-06T10:05:23

$820

We know the formula of simple Interest :

#I = [PNR]/100# [ Where I = Interest, P = Principal, N = No of years and R = Rate of interest]

In the first case,

P = $7000. N = 1 and R = 11%

#So, Interest(I) = [7000*1*11]/100 = 770#

For second case,

P = $1000, N = 1 R = 5%

So, #Interest(I) = [1000*1*5]/100 = 50#

Hence total Interest = $770 + $50 = $820