how much was invested in the certificate of deposit

Question

john invested some money in a certificate of deposit that earns 5.5% annual simple interest and $ 8,000 more in a municipal bond that earns 6% annual simple interest. if the amount of interest earned in one year was $1630, how much was invested in the certificate of deposit

Answer 1

Let:

P₁ = Principal amount in the certificate of deposit (r₁ = 0.055)

P₂ = P₁ + 8000 = Principal amount in the municipal bond (r₂ = 0.06)

 

Using I = Prt; t = 1; I = Pr

 

I₁ + I₂ = 1630

P₁r₁ + P₂r₂ = 1630

P₁(0.055) + (P₁ + 8000)(0.06) = 1630

 

P₁ = 10000