need help with this word problem please!

Question

stuck on this on

 

Parents set up a trust fund for their children last year. part of it is earning 6% simple interest per year while the rest of it is earning 5% siple interest per year. they placed $4000 in trust fund. in one year the trust fund has earned $220. how much did they invest at each interest rate?

 

the amount invested at 6% in the trust fund is?????

Answer 1

Rebecca, you need to set up two equations with two unknowns which you can then solve.

 

The two unknowns should be the amount of money in each account as you are told two things about those amounts.  First, what they both total to.  Second how much interest they both generated.

 

Lets call "A" the amount put into the account at 6% simple interest.  And call "B" the amount put into that account at 5%.

 

So the total amount in both accounts (4000) equals A+B

and the interest from both accounts (220) equals the interest on A + the interest on B.   The formula for simple interest is 

I=Prt ie interest equals proncipal times rate times time.  So the interest on from the money in A equals A x (.06) x 1 yr and on B equals B x (.05) x (1yr).  This will produce our two equations:

A+B=4000

(.06)A+(.05)B=220