An executive invests $29,000, some at 8% and the rest at 4% annual interest. If he receives an annual return of $1,800, how much is invested at each rate?

Question

An executive invests $29,000, some at 8% and the rest at 4% annual interest. If he receives an annual return of $1,800, how much is invested at each rate?

Answer 1

.08x + .04(29-x) = 1.8

.08x -.04x = 1.8 - 1.16 = 0.64 measured in units of $1000

.04x = 0.64

x = .64/.04 = 16 = $16,000 invested at 8%

29-x 29-16 = $13,000 invested at 4%

1800/29000 = about 6.2% return

8% is a little closer to 6.2% than 4% is, so there should be a little more invested at 8%

.08(16) + (.04)(13 = 1.28 + 0.52 = 1.8 = $1800 annual return on both