This is a mixture problem

Question

A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interests earned after one year is $900.00, how much money was invested at each rate?

Answer 1

18750 - (20% of 18750) = 80% of 18750

.8(18750) = $15,000 that was invested

 

If she invests x dollars at 4% then she

invests 15000-x at 7%

 

I =prt

Total interest earned is the sum of the interest earned

at the two rates

 

900 = x(.04)(1) + (15000-x)(.07)(1)

900 = .04x + 1050 - .07x

900 = -.03x + 1050

-150 = -.03x

 

x = (-150)/(-.03)

x = $5000 invested in the 4% CD

 

15000-x = $10,000 invested in the 7% savings bond