A woman has $12,000 to invest.

Question

She invests part of the money in an account that pays 10% per year & the rest in an account that pays 12% per year. If the interest earned in the first year is $1320, how much did she invest

Answer 1

This is really more of an algebra problem than it is a finance problem.

Let p = the amount she invests in the account that pays 10% per year.

Then ( 12,000 - p ) = the amount she has to invest in the account that pays 12 %

We know that the total amount of interest earned on the two accounts is $1,320

So we have the equation

.p x .10 + ( 12000 -p ) x .12 = 1320

-.02 = -120 and p = 6000

So you invest $6000 in both accounts. You should check to see that this solution works