Question

You inherited 10000 with the stipulation that for the first year the money must be invested in two stocks paying 6% and 11% annual interest, respectively. How much should be invested at each rate if the total interest earned for the years is to be 700?

A) 7000 invested at 6% 3000 invested at 11%
B)9000 invested at 6% 1000 invested at 11%
C) 8000 invested at 6% 2000 invested at 11%
D) 2000 invested at 6% 8000 invested at 11%

Answer 1

C) 8000 at 6%; 2000 at 11%

Explanation:

Let x represent the amount invested at 11%. Then the total interest earned is ...

0.11x +0.06(10000 -x) = 700

0.05x = 100 . . . . . . . . . subtract 600, collect terms

x = 2000 . . . . . . . . . divide by 0.05

8000 is invested at 6%; 2000 is invested at 11%.