Question

Last year Kareem had $ 20 , 000 to invest. He invested some of it in an account that paid 8 % simple interest per year, and he invested the rest of it in an account that paid 7 % simple interest per year. After one year, he received a total of $ 1540 in interest. How much did he invest in each account?

Answer 1

Answer:

$14,000 and $6,000

Explanation:

Account A = Account that paid 8% simple interest

Account B = Account that paid 7% simple interest

W1 = Proportion of money invested in Account A

W2 = Proportion of money invested in Account B

W2 = 1 - W1

Total interest Kareem received = $1,540

Total interest = ($20,000) (W1) (8%) + ($20,000) (W2) (7%)

$1,540 = (1600) (W1) + (1400) (1-W1)

Solving for W1

W1 = 0.7

W2 = 1 - W1 = 1 - 0.7 = 0.3

Money invested in Account A = 20,000 x 0.7 = $14,000

Money invested in Account B = 20,000 x 0.3 = $6,000