Story problem

Question

Kathy won 10000 she wants to split her winnings into two accounts. A savings account with an Apr of 2.64% and a mural fun with an Apr of 8.9% she hopes to earn $750 at the end of the year

Answer 1

First, define variables:

s = $ in savings account

m = $ in mutual fund

 

Now, establish relationships between s and m:

"10000 she wants to split her winnings into two accounts"

10,000 = s + m solve for s

10,000 - m = s  (equation 1)

 

"savings account with an Apr of 2.64% and a mural fun with an Apr of 8.9% she hopes to earn $750 "

0.0264s + 0.0890m = 750  multiply both sides by 10,000 to eliminate decimals

264s + 890m = 7,500,000   (equation 2)

 

substitute equation 1 into equation 2 and solve for m:

264(10,000 - m) + 890m = 7,500,000   distribute

2,640,000 - 264m + 890m = 7,500,000   combine like terms and subtract 2,640,000 from both sides

626m = 4,860,000     divide both sides by 626

m = 7763.58

 

Last, solve for s:

10,000 - m = s = 10,000 - 7,763.58 = 2,236.42

 

Kathy should put $2,236.42 in a savings account and $7,763.58 in a mutual fund.

 

Check:

$2,236.42 + $7,763.58 = $10,000

0.0264($2,236.42) + 0.0890($7,763.58) = 750