Carlos invested $10,000 at 7%, $20,000 at 6.5%, and $50,000 at 5%. What is the average rate of interest earned by his investments?
A) 6.2%
B) 5.5%
C) 5.8%
D) 5.6%
E) 6.3%

Question

Quizplus · Accepted Answer

The total interest earned from all investments can be calculated by multiplying each investment amount by its respective interest rate and then summing these amounts. The total investment is $80,000 ($10,000 + $20,000 + $50,000). The interest from each investment is $700 ($10,000 * 7%), $1,300 ($20,000 * 6.5%), and $2,500 ($50,000 * 5%), respectively. The total interest earned is $4,500 ($700 + $1,300 + $2,500). The average rate of interest is the total interest divided by the total investment amount, then multiplied by 100 to convert to a percentage: ($4,500 / $80,000) * 100 = 5.625%, which rounds to 5.6%.

Carlos Invested $10,000 at 7%, $20,000 at 6