Question

Shawn has $15,000 to invest. She will put some of it into a fund that pays 4.5% annual interest and the rest in a certificate of deposit that pays 1.8% annual interest. How much should she invest in each account if she want to earn 4.05% annual interest on the total amount?

Answer 1

12500 fund

2500 certificate

Explanation:

Write the equation by adding the interest, and solve for x.

0.045x+0.018(15,000−x)0.045x+270−0.018x0.027xx=0.0405(15,000)=607.5=337.5=12,500

So, she should invest $12,500 in the fund and $15,000−$12,500=$2,500 in the certificate.

Answer 2

The amount to invest in a fund that pays 4.5% should be $12,500 and the amount to invest in a certificate of deposit that pays 1.8% should be $2,500.

Explanation:

Let

x -----> the amount invested in a fund that pays 4.5%

$15,000-x -----> the amount invested in a certificate of deposit that pays 1.8%

we know that

The interest earned in a fund that pays 4.5% plus the interest earned in a certificate of deposit that pays 1.8% must be equal to the interest earned by the total amount at 4.05%

`4.5x+1.8(15,000-x)=4.05(15,000)`

Solve for x

`4.5x+27,000-1.8x=60,750`

`4.5x-1.8x=60,750-27,000`

`2.7x=33,750`

`x=\$12,500`

so

`15,000-x=\$2,500`

therefore

The amount to invest in a fund that pays 4.5% should be $12,500 and the amount to invest in a certificate of deposit that pays 1.8% should be $2,500.