ShmoopTube

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Thank you We sneak And here's your shmoop du jour

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brought to you by investment funds We love them and

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we're sure the feeling is mutual All right eduardo has

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eighty five hundred bucks to invest invest seventy five percent

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of his money and fund a and twenty five percent

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was money in fund be fund a earns three point

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five percent interest annually while fund be earns four point

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two percent interest annually after two years How much money

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will eduardo have and hear the potential Answer what I

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kind of heard that interest income is your money So

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assuming eduardo has left his investment earnings untouched hasn't blown

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it all on star wars memorabilia We need to decide

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how much dough he'll have in his two funds by

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the end of two years Well eduardo would much rather

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be playing with his stormtrooper action figures than doing the

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math themselves so well the onus is on us Well

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it's a slow day we don't have much else going

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on First things first How much is eduardo putting into

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each fun Well we're told he has eighty five hundred

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bucks total and we put seventy five per cent of

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that money to fund A twenty five percent into fund

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be so here we just have a couple of simple

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multiplication problems We can convert our percentages two decimals to

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make them easier to work with So seventy five percent

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becomes point seven five and twenty five percent becomes point

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two five then we multiply each by the eighty five

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hundred bucks Well looks like he put six thousand three

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or seventy five dollars into fund a and two thousand

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one hundred twenty five dollars into fund Be way can

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add those two together to double check our work if

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we're worried And yet six three seven five plus two

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one to five equals eighty five hundred So we're golden

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now for each fund we need to determine the interest

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Fortunately there's an app for that they're well formula Anyway

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i equals p arty that's interest equals the principal multiplied

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by the rate multiplied by the time now he just

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plug in chuck so for fun day our interest will

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equal six thousand three hundred seventy five our principal times

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A raid of three point five percent which is point

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o three five and decimal form Don't forget that o

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times to the number Of years eduardo's been accumulating interest

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on his initial investment way come up with four hundred

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forty six dollars and twenty five cents in interest accrued

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Add that to the original six thousand three hundred seventy

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five investment and fund a is now worth six thousand

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eight hundred twenty one dollars and twenty five cents Now

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the same spiel for fun be the principal is two

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thousand one hundred twenty five bucks times a rate of

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four point two percent or point zero or two times

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to well we get one hundred seventy eight bucks and

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fifty cents and interest accrued lost The two thousand one

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hundred twenty five dollar investment and fund b is now

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worth two thousand three hundred three dollars and fifty cents

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Who it's grand total time Can we get a drum

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roll please Adding together the six thousand eight hundred twenty

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one point twenty five from fund eh and the two

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thousand three hundred three point fifty from fund be waken

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See that eduardo's initial investment of eighty five hundred dollars

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has magically in mystically turned into nine thousand one hundred

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twenty four dollars seventy five cents whom that'll buy you

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a ton of nab Billion nerve knockers So yeah answer

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C is the one we want at ease Eduardo Good

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luck bringing down the galactic empire That extra six hundred 00:03:17.613 --> [endTime] bucks and change really help

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