Algebra 1 Interest Question

Question

Kimberly wants to invest $3,000 in an account that earns 4% annual interest, and x dollars in an account that earns 7%, so that, on average, she earns 5.5% interest for both accounts. Select the equation to model the situation.

1. A. 0.04(3,000) + 0.07x = 0.55x
2. B. 0.055(3,000 + x) = 120 + 0.07x
3. C. 0.04x + 0.07x = 3,000
4. D. 0.055(3,000) = 0.04x + 0.07x

Please explain:

Answer 1

Assuming that the money is invested at simple interest for one year, we have:

0.04(3000) + 0.07x = 0.55(3000 + x)

So, 120 + 0.07x = 0.55(3000 + x).

The correct answer is B.

Answer 2

"A" is your answer; just look at the interest rates.