Jeremy just inherited $43300. He chooses to invest some of his inheritance in a mutual fund that pays 5% and the rest in a less risky CD that pays 3%

Question

Jeremy just inherited $43300. He chooses to invest some of his inheritance in a mutual fund that pays 5% and the rest in a less risky CD that pays 3%. If his annual interest between the two accounts is $1515, how much did he invest in each account?

Amount invested in mutual fund paying 5% interest = $

Amount invested in CD paying 3% interest = $

Answer 1

In order to solve this problem, first set any variable (i.e. "x") as the amount invested in the mutual fund that pays 5% interest. Then you would get the equation 0.05x + (43,300-x)(0.03) = 1515. Simplifying the equation gives you 0.02x = 216, giving you x = 10,800. Therefore, Jeremy invested $10,800 in the 5% interest mutual fund. Whatever is left is how much he invested in the 3% interest CD, which is $32,500. Hope this helps!