Question

2. $6000 is divided between two accounts, one paying 4% interest and the other paying 5% interest. At the end of one interest period, the interest earned by the 4% account exceeds the interest earned by the 3% account by $65. How much was invested in each account?

Answer 1

The correct answer is:

- Account “A”: $3500

- Account “B”: $2500

Explanation:

* As the main account is split in two:

- Account “A”: n

- Account “B”: $6000-n

* Let’s consider Account “A” will be applied 4% interest and Account “B” will be applied 3% interest.

* In the problem, the Simple Interest Rate is used:

Simple Interest Formula = Principal x Interest Rate x Time Period

* According to the problem, at the end of 1 interest period, applying the Simple Interest Formula:

- Account “A”: 4n/100

- Account “B”: (3($6000-n))/100 + $65

- Solving the equation:

4n/100= 3($6000-n)/100 + $65

4n/100=$18000/100- 3n/100+$65

7n/100=$180+$65

7n=$245 x 100

n=$3500

→ Account “A”: $3500

→ Account “B”: $6000-$3500 = $2500