Question

You split $1500 between two savings accounts one pays 4%interest and the other pays 5% after one year you have earned $69.50 in interest. How much was in the 4% account

Answer 1

Explanation:

Use the basic simple interest formula:

P * r * t = I and put the info into a table with those variables along the top, formig the columns we need:

P * r * t = I

Acct 1

Acct 2

If we have a total of 1500 to split up between 2 accounts, we put x amount of money into one and then have 1500-x left to put into the other. We will fill those in along with the interest rates in decimal form and the time of 1 year:

P * r * t = I

Acct 1 x .04 1

Acct 2 1500-x .05 1

Looking at the formula we are told that Prt = I, so we will multiply P times r times t and fill in the I column:

P * r * t - I

Acct 1 x .04 1 .04x

Acct 2 1500-x .05 1 .05(1500-x)

The total Interest earned by the addition of the interest earned from both accounts is 69.50. So we add the interest column together and set it equal to 69.50:

.04x + .05(1500 - x) = 69.50 and

.04x + 75 - .05x = 69.50 and

-.01x = -5.5 so

x = 550

That's how much money is in the account earning 4% interest.