Tevin just inherited $48900. He chooses to invest some of his inheritance in a mutual fund that pays 8% and the rest in a less risky CD that pays 4%.

Question

Tevin just inherited $48900. He chooses to invest some of his inheritance in a mutual fund that pays 8% and the rest in a less risky CD that pays 4%. If his annual interest between the two accounts is $2600, how much did he invest in each account?

Amount invested in mutual fund paying 8% interest = $

Amount invested in CD paying 4% interest = $

Answer 1

Let x dollars he put on 8% accoun. Then (48900 - x) dollars he put on 4% account. Then we have equation: 0.08x + 0.04(48900 - x) = 2600; 0.08x - 0.04x = 2600 - 48900·0.04; 0.04x = 644; x = $16100;

$16100 on 8% and $32800 on 4%