Question

5000 is invested at 3% interest. How much money must be invested at 5% so that the total interest from the two investments is $275 after one year

Answer 1

2,500 dollars

Explanation:

They invest 5000 dollars at 3% interest for one year.

The formula for Simple Interest is S.I. = P*R*T

Where S.I. stands for Simple Interest, P stands for principal amount invested, R stands for Rate of interest (in decimals), T stands for Time (in years).

So Simple interest will be S.I. = 5000 x (3/100) x 1 = 150 dollars.

Similarly they want to invest some amount say M at 5% interest for one year, then simple interest would be S.I. = M x (5/100) x 1 = 0.05M dollars.

They want total interest from two investments to be 275 dollars.

So, 150 + 0.05M = 275

0.05M = 275 - 150 = 125

M = 125/0.05 = 12500/5 = 2,500 dollars.

Hence, they invest 2,500 dollars at 5% interest.

Answer 2

$2500

Explanation:

We know that 5000 is invested at 3% and we are to find the amount of money which must be invested at 5% such that the total interest after one year is $275.

Supposing x to be the amount of money to be invested, we can use the following equation to solve this problem:

0.03 * 5000 + 0.05x = 275

5x = 27500- 15000

5x = 12500

x = $2500

Therefore, $2500 must be invested.