Interest Problems Ann invested $12,000 in two bank accounts. One of the accounts pays 6% annual interest, and the other account pays 5% annual interest. If the combined interest earned in both accounts after a year was $700, how much money was invested in each account? Show What are we trying to find in this problem? We want to know the amount of money invested in each account-- in other words, we want to know the amount invested in the 6% account and the amount invested in the 5% account. Each of the things we are trying to find will be represented by a variable: x = amount invested at 6% Since we have two variables to solve for, we will need to find a system of two equations to solve. How do we find the two equations we need? We are given two numbers in the problem: $12,000 = total money invested in both accounts Let's start with the $12,000. Ann wants to split this money into two parts. We have chosen to call the two parts x and y. Since these two parts must total to $12,000, this gives us our first equation: x + y = 12,000 Now let's look at the $700, the interest earned on the two accounts together. Let's think about the formula for calculating simple interest : Interest = (Principle)(Rate)(Time) Since the time period in this problem is one year, our simple interest equation becomes: Interest = (Principle)(Rate)(1) Each account has a different amount of money invested in it (either x dollars or y dollars), and each account has a different interest rate (either 6% or 5%). This gives us the following: Interest earned on x dollars = (x)(6%) = .06x and Interest earned on y dollars = (y)(5%) = .05y The total interest earned in both accounts is $700, so our second equation is: Interest earned on x dollars + interest earned on y dollars = total interest If we multiply both sides of this equation by 100 to clear the decimals, it becomes: Now we'll solve the system of equations: x + y = 12,000 Multiply the first equation by -5, then add the equations: -5x - 5y = -60,000 Ann invested $10,000 in the account that pays 6% interest. To find the amount invested in the other account, substitute 10,000 for x in either of our equations. We'll choose the easier equation: x + y = 12,000 Ann invested $2,000 in the account that pays 5% interest.
Post your comments here:Name *: Email : (optional) » Your comments will be displayed only after manual approval. At what rate of interest per annum would an amount 750 Yield?Explanation: Formula to find the rate of interest : , where I = Simple interest , P=principal amount and t = time. Hence, the rate of interest is 6%.
What rate gives Rupees 750 as interest for 2 years on sum of rupees 4500?∴ Rate of interest is 8 1 3 %.
What will be the rate of simple interest so that 750 amounts to 1200 in 6 years?The rate of interest will be 10% per annum so that Rs 750 amounts to Rs 1200 in 6 years.
At what rate percent on simple interest will $750 amount to $900 in 5 years?750 amounts to Rs 900 at 4% per annum in 5 years.
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