Use a system of linear equations with two variables and two equations to solve.

Question

If an investor invests $24,000 into two bonds, one that pays 4% in simple interest, and the other paying 2% simple interest, and the investor earns $690 annual interest, how much was invested in each account?

 Round your answers to the nearest dollar.

2% Bond $________

4% Bond $________

Answer 1

.04x + 02(24000-x) =690

.04x-.02x = 690-480

..02x = 210

x =210/.02 = $10,500 invested at 4%

24-x = $13,500 invested at 2%

690/24,000 = 2.875% = average interest

4-2.875 = 1.125

2.875 -2 = 0.875

135/105 = about 1.286

1.125/0.875 = 1.286

2% is about 1 1/4 times closer to the average interest

so you need about 1 1/4 more invested at 2% than 4%