Word problem.. Need help!

Question

A mother wants to invest $5,000.00 for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) which earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $300.00, how much money was invested in the CD account?

Answer 1

Hi Brooke,

 

Let's see what we have.

 

Let's let

C = amount invested in CD returning 4%

B = amount invested in savings bond earning 7%

 

We know from the first sentence

C + B = 5000

This can be written as

B = 5000-C

 

 

From the second and third sentences we have

.04C + .07B = 300

 

Since B = 5000-C, let's substitute this into the equation above as follows.

.04C + .07B = 300

.04C + .07(5000-C) = 300

 

Now distribute and solve for C

.04C + 350 - .07C = 300

-.03C = -50

C = $1,666.67 invested in CD.