Simple Algebra Interest

Question

Last year Kareem had $20,000 to invest. He invested some of it in an account that paid 8% simple interest per year, and he invested the rest of it in an account that paid 7% simple interest per year. After one year, he received a total of $1540 in interest. How much did he invest in each account?

Answer 1

Let x = amount invested at 8%

Then, 20000 - x = amount invested at 7%

0.08x + 0.07(20000 - x) = 1540

0.08x + 1400 - 0.07x = 1540

0.01x = 140

x = 14000 and 20000-x = 6000

Answer 2

a + b = 20,000 -----> a = 20,000 - b

0.07a + 0.08b = 1540

Suuuuubstitute!

0.07(20,000 - b) + 0.08b = 1540

1400 - 0.07b + 0.08b = 1540

0.01b = 140

b = $14,000

a = 20,000 - 14,000

a = $6000