Investment Rate

Question

Jack and Diane invest $25000 at the first national bank, part at 2.5% and the rest at 6%. The annual return is $1290 how much money is invested at each rate.

 

 

Answer 1

Hi Joe, set this up as a system of equations. Let x represent the amount of money invested at 2.5%. Let y represent the amount of money invested at 6%.

 

The two equations are:

 

       x +     y = 25000

.025x + .06y =   1290

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I do not like to work with decimals, so multiply the second equation by 1000 to clear the decimals.

 

    x   +     y  =     25000

25x   +  60y  = 1290000

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Eliminate the x terms by multiplying the first equation by -25:

 

-25x   - 25y   =   625000

 25x  + 60y   = 1290000

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            35y  = 665000

 

Divide both sides by 35:

 

y = 19000

 

Substitute for y in the first equation to find x:

 

x + 19000 = 25000

 

Subtract 19000 from both sides:

 

x = 6000

 

Solution:

 

Jack and Diane invested $6000 at an interest rate of 2.5% and $19000 at an interest rate of 6%.

 

Questions?