Question

An executive invests $27,000, some at 7% and the rest at 4% annual interest. If he receives an annual return of $1,530, how much is invested at each rate?

Answer 1

hi

Let's call money invested at 7% X and the one at 4% Y

So we have :

X+Y = 27 000 (1)

0.07X + 0.04 Y = 1 530 (2)

As X+Y = 27 000 then Y = 27 000 -X

then we have in line (2)

0.07X + 0.04 ( 27 000 -X) = 1 530

0.07X + 1080 -0.04 X = 1 530

0.07X - 0.04X = 1530 - 1080

0.03X = 450

X = 450 / 0.03

X = 15 000

Now X = 15 000

so Y = 27 000 - 15 000 = 12 000

Answer is : 15 000 dollars were invested at 7% and 12 000 at 4%

Let's check to be sure :

15 000 * 0.07 = 1 050

12 000 *0.04 = 480

and 1 050 + 480 = 1 530