Interest Rate Problem

Question

An executive invests $24,000, some at 6% and some at 4% annual interest. If he receives an annual return of $1,260, how much is invested at each rate?

Answer 1

Hi Taylor

 

So one thing you know is that whatever part of the money is invested at 6%, let's call that X, the rest of the money invested at 4% is 24000 - X.  Simple interest is just the interest rate multiplied by the amount so let's set up the equation:

 

6% * X + 4% * (24000 - X) = 1260

 

Now we can solve for X

 

.06X + 960 - .04X = 1260

.02X = 300

X = 15000 <---this is how much is invested at 6%

24000 - X = 9000  <---this is how much is invested at 4%

 

All the best

 

Lori