Question

If an investor invests $24,000 into two bonds, one that pays 4% in simple interest, and the other paying 2% simple
interest, and the investor earns $700 annual interest, how much was invested in each account?
Round your answers to the nearest dollar.
2% bond: $
4% bond: $

Answer 1

Answers:

2% bond: $11000

4% bond: $13000

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Explanation:

x = amount invested in the 4% bond

y = amount invested in the 2% bond

Amounts are in dollars

The two amounts add to $24,000 so

x+y = 24000

y = -x+24000 is one equation to set up

0.04x = interest earned from the 4% bond

0.02y = interest earned from the 2% bond

0.04x+0.02y = total interest earned = $700

0.04x+0.02y = 700 is another equation to set up

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The system of equations is

$\begin{cases}y = -x+24000\\0.04x+0.02y = 700\end{cases}$

Apply substitution. Solve for x.

0.04x+0.02y = 700

0.04x+0.02(-x+24000) = 700

0.04x-0.02x+480 = 700

0.02x= 700-480

0.02x= 220

x= 220/(0.02)

x = 11000

Use this to find y

y = -x+24000

y = -11000+24000

y = 13000