Question

Sally's $8,800 savings is in two accounts. One account earns 2% annual interest and the other earns 6%. Her total interest for the year is $440. How much does she have in each account?

Answer 1

In the 2% account, Sally has $2200 and in the 6% account, Sally has $6600.

Explanation:

Suppose the amount invested at 2% is $X and the amount invested at 6% is $Y (assuming that the college student invested all his/her income on the two schemes). Therefore:

X + Y = 8800 (The sum of investments is basically the total income).

0.02X + 0.06Y = 440 (The sum of the interest received from the invested amounts is actually the total return).

Now solving these 2 simultaneous equations:

x + y = 8800 (Equation 1)

2x + 6y = 44000 (Equation 2)

From (Equation 1):

x = 8800 - y (Equation 3)

Put (Equation 3) in (Equation 2):

2(8800 - y) + 6y = 44000.

17600 - 2y + 6y = 44000.

4y = 26400

y = 6600.

To find x, substitute y = 6600 in equation 3. This gives:

x = 8800 - y.

x = 8800 - 6600.

x = 2200.

So in the 2% account, Sally has $2200 and in the 6% account, Sally has $6600!!!