Question

John invested $12,000 in two accounts, one that earns 7% interest and another that earns 4%. If the total interest earned after one year was $507.90, how much was invested in each account?

Answer 1

Answer:

$930 was invested in account-1 at 7% interest rate and $11,070 was invested in account-2 at 4% interest rate.

Explanation:

Let the amount invested in account-1 be x and amount invested in account-2 be y.

Total mount invested in both accounts = $12,000

x + y = $12,000....[1]

Simple interest earned from account-1 at 7% interest:

$S.I=\frac{x\times 7\times 1}{100}=0.07x$

Simple interest earned from account-2 at 4% interest:

$S.I'=\frac{y\times 4\times 1}{100}=0.04y$

Total interest earned = $507.90

S.I + S.I' = $507.90

0.07x + 0.04y = $507.90....[2]

Solving both equations , we get x and y :

y = $11,070

x = $930

$930 was invested in account-1 at 7% interest rate and $11,070 was invested in account-2 at 4% interest rate.