You invested ​$25,000 in two accounts paying 4% and 5% annual​ interest, respectively. If the total interest earned for the year was $1110, how much was invested at each​ rate?

Answer 1

Hi Kev M.

Are you assuming simple interest only, since there was no mention of compounding and the question involved only a year?

$14000 invested at 4%

$11000 invested at 5%

Please see below:

You have the total amount invested and the total interest earned

I suggest that you use a system of equations for your problem and solve by substitution

Let x = amount invested at 4%

Let y = amount invested at 5%

Equations for the total amount invested

x + y = 25000

y = 25000 -x

Equation for the total interest earned

0.04x + 0.05y = 1110

Substituting for y

0.04x + .05(25000 -x) = 1110

0.04x + 1250 -.05x = 1110

.04x - .05x + 1250 = 1110

-0.01x = 1110 -1250

-0.01x = -140

x = -140/-0.01

x = 14000

y = 25000 - x = 25000 - 14000 = 11000

Checking

0.04(14000) + .05(11000) =1110

560 + 550 = 1110

1110 = 1110

I hope this helps