Question

A total of $6000 is invested for 5 yr with a total return of $1080. Part of the money is invested in a fund that returns the equivalent of 2% simple interest. The rest of the money is invested at 4% simple interest. Determine the amount invested in each account.

Answer 1

$1,200 were invested at 2% simple interest

$4,800 were invested at 4% simple interest

Step-by-step explanation:

Let x be the amount invested in a fund that returns the equivalent of 2% simple interest and y be the amount invested at 4% simple interest.

`x+y = 6000\\0.02x*5 +0.04y*5 = 1080\\0.1x +0.2y = 1080`

Combining the first and third equation:

`x+y = 6000\\(x +2y)-(x+y) = 10800-6000\\y= 4800\\x = 6000 - y = 6000 - 4800\\x=1200`

$1,200 were invested at 2% simple interest and $4,800 were invested at 4% simple interest