Question

A team of cancer research specialists received a grant of $500,000 to be used for cancer research. They deposited some of the money in a 10% simple interest account and the remainder in an 9% annual simple interest account. How much was deposited in each account if the annual interest is $49,500?

Answer 1

• $450,000 at 10%
• $50,000 at 9%

Explanation:

Let x represent the amount invested at 10%. Then the total interest earned per year is ...

0.10x + 0.09(500,000-x) = 49,500

0.01x = 49500 -45000

x = 4500/0.01 = 450,000

$450,000 was deposited in the 10% account; $50,000 was deposited in the 9% account.