Erica invest some money in three different accounts.

Question

Erica invest some money in three different accounts. She puts some of it in a CD earning 3% simple interest and twice as much in an ira paying 4% simple interest. She also decides to invest $1000 more than what she’s invested in the CD into a mutual fund earning 5% simple interest. Determine how much money Erica invested in each account if she earned $370 in interest after 1 year.

Answer 1

x = Dollars invested in 3% Certificate of Deposit

2x = Dollars invested in 4% IRA

x+1000 = Dollars invested in 5% mutual fund

 

The total interest for the year is $370

 

I = prt where t = 1 so I = pr for each investment

 

0.03x + 0.04(2x) 0.05(x + 1000) = 370

Multiply through by 100 to clear decimals

3x + 4(2x) + 5(x+1000) = 37000

3x + 8x + 5x + 5000 = 37000

16x = 32000

x = $2000 invested in 3% CD

2x = $4000 invested in 4% IRA

x+1000 = $3000 invested tin 5% mutual fund