Question

Mark wants to invest $10,000 to pay for his daughter’s wedding next year. He will invest some of the money in a short term CD that pays 12% interest and the rest in a money market savings account that pays 5% interest. How much should he invest at each rate if he wants to earn $1,095 in interest in one year?

Answer 1

12% amount is 8500

5% amount is 1500

Step-by-step explanation:

Answer 2

market saving accounts: 1,500

Certificate of Deposit: 8,500

Step-by-step explanation:

We build the accounting equation:

`\left \{ {{A + B = 10,000} \atop {0.12A + 0.05B = 1,095}} \right.`

we re-express the first part and replace:

A = 10,000 - B

0.12(10,000 - B) + 0.05B = 1,095

and solve for B

1,200 - 0.12B + 0.05B = 1,095

1,200 - 1,095 = 0.07B

105 / 0.07 = B

B = 1500

market saving accounts: 1,500

now we sovle for CD:

10,000 - 1,500 = 8,500 Certificate of Deposit