Question

An executive invests $26,000, some at 5% and the rest at 4% annual interest. If he receives an annual return of $1,180, how much is invested at each rate?

Answer 1

Answer:

$14,000 was invested at 5% interest rate and $12,000 at 4%.

Explanation:

Let the amount invested at 5% interest rate by p then the amount invested at 4% will be

$26,000 - p

Given that the annual returns from the two investments amounts to $1,180

This means that;

(5% of p) + (4% of $26,000 - p) = $1,180

0.05p + $1040 - 0.04p = $1,180

0.01p = $1,180 - $1040

0.01p = $140

p = $14,000

$26,000 - p = $26,000 - $14,000

= $12,000

This means that $14,000 was invested at 5% interest rate and $12,000 at 4%.