Question

A mother wants to invest ​$12 comma 000.00 for her​ son's future education. She invests a portion of the money in a bank certificate of deposit​ (CD account) which earns​ 4% and the remainder in a savings bond that earns​ 7%. If the total interest earned after one year is $ 720.00 comma how much money was invested in the CD​ account?

Answer 1

A = $4000

Step-by-step explanation:

given data:

total investment $12000

interest on CD= 4%

Interest on bond =7%

the portion invested in the CD is A

total portion invested as a bond = $12,000 - A

total portion earned on the CD = 0.04A.

The total interest gain on the bond = 0.07(12000 - A).

equation for the total interest earned is:

0.04A + 0.07(12000 - A) = 720

0.04A + 840 - 0.07A = 720

-0.03A = -120

A = $4000