what is the investment of the 7,000 and 4,000?

Question

The annual interest on a $7,000 investment exceeds the interest earned on a $4,000 investment by $283. The $7,000 is invested at 0.4% higher rate of interest than $4,000. What is the interest rate of each investment?

Answer 1

r = rate for the $4000

 

7000(r + 0.004) = 4000(r) + 283

7000r + 28 = 4000r + 283

3000r + 28 = 283

3000r = 255

600r = 51

r = 0.085

r = 8.5%

 

The $4000 is invested at 8.5% and the $7000 is invested at 8.9%