Suppose you invest a certain amount of money in an account that pays 14% interest annually, and $2,000 more than that in an account that pays 15% annually.

Question

How much money do you have in each account if the total interest for a year is $880?

Answer 1

So, we know that the interest is given by P*r*t, which P is for Principal amount, t is for time, which is in years, and r is the interest rate. So we know that the account that has 2000 principal cash has an interest of:

2000*.14*1=280

So $280 is our total interest in 1 year of investment. So we now know that the interest of the other account is $600, since both investments combine to make an interest of $880.

So now for our other investment, we need to solve for X, since 600=X*.15*1

600=X*.15

600*100/15= 60000/15=4000.

So now we know that we needed to invest 4000 dollars in order to get an interest of $600, and when we add the total interest from both investments, we get $880.

Thank you and I hope me putting this more in words helped you understand the problem from a conceptual level.