Question

You invested $20,000 in two accounts paying 5% and 6% annual interest, respectively. If the total interest earned for the year was $1080, how much was invested at each rate?

Answer 1

The amount invested at 5% was $12000

The amount invested at 6% was $8000

Explanation:

Let

x be the amount invested at the rate 5%

and 20000-x be the amount invested at 6%

The profit is $1080

The equation will be:

0.05x + 0.06(20000-x) = 1080

0.05x + 1200 - 0.06x = 1080

0.05x-0.06x = 1080-1200

-0.01x = -120

0.01x = 120

x = 120/0.01

x= $12000

The amount invested at 5% was $12000

And the amount invested at 6% was:

= 20000-12000

= $8000 ..