Question

Need help plz .You have $2500 to invest in two different accounts. In order to save the money you need for college, you need to average 7% interest. If the two accounts pay 7.5% and 6% interest, how much should you invest in each account? Round to the nearest dollar amount.

A)$1667 in 7.5%, $833 in 6%


B)$1833 in 7.5%, $667 in 6%


C)$667 in 7.5%, $1833 in 6%


D)$833 in 7.5%, $1667 in 6%

Answer 1

A)$1667 in 7.5%, $833 in 6%

Explanation:

You need to average 7% interest.

initial investment = $2500

7% of $2500 =
`(7)/(100)` × 2500 ⇒ (0.07 ) × (2500) ⇒ $175

so the combined interest from both accounts should be $175

Checking options:

A)$1667 in 7.5%, $833 in 6% ∵ 7.5 % = 0.075

(1667 × 0.075) + (833 × 0.06) 6 % = 0.06

125.025 + 49.98 ⇒ 175.005

B) $1833 in 7.5%, $667 in 6%

(1833 × 0.075) + (667 × 0.06)

137.475 + 40.02 ⇒ 177.495

C)$667 in 7.5%, $1833 in 6%

(667 × 0.075) + (1833 × 0.06)

50.025 + 109.98 ⇒ 160.005

D)$833 in 7.5%, $1667 in 6%

(833 × 0.075) + (1667 × 0.06)

62.475 + 100.02 ⇒ 162.495

Option A is the closest to average7% interest of $2500, which is $175.