Solving a Tax Rate or Interest Rate Problem

Question

Last year, Scott had $20,000 to invest. He invested some of it in an account that paid 6% simple interest per year, and he invested the rest in an account that paid 5% simple interest per year. After one year, he received a total of $1150 in interest. How much did he invest in each account?

Answer 1

.06x + .05(20000-x) = 1150

.01x = 1150- 1000

x=150/.01

x = $15000 invested at 6%

20000-15000 = $5000 invested at 5%

check the answers

.06(15000) + .05(5000)

= 900 + 250

= 1150

1150/20000 = .0575 = 5.75% average interest on $20,000

5 is withint .75 of 5.75

6 is within .25 of 5.75

.75/.25 =3

you need 3 times as much invested at 6% as at 5%

$15000 invested at 6%

$5,000 invested at 5%

15000/5000 = 3