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Question

A mother wants to invest $5000.00 for her son’s education. She invests a portion of the money in a bank certificate of deposit (CD account) which earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned is $300.00, how much money was invested into the CD account?

 

 

 

Please show work and explain!

Answer 1

Total interest =300 = Interest from CD + Interest from savings bond

Interest from CD = .04(portion1). This is because .04 is 4%. 

Interest from bond = .07(portion2). Again .07 is 7%.

portion1 + portion2 = 5000. portion1 and portion2 were made up variable names. They could just as easily be called x and y. 

 

300=.04(portion1)+.07(portion2)

portion1 + portion2 = 5000. This gives portion2 = 5000 - portion1. I chose to solve for portion2 because the question asks for portion1, or the portion in the CD. 

300=.04(portion1) +.07(5000-portion1)

300=.04(portion1)+350-.07(portion1)

-50=-.03(portion1)

1667=portion1

 

Let's check the answers then. portion2=5000-1667=3333. 

.04(1667)+.07(3333)=300. The answer is correct.