Ryan was 8 when his parents invested $4000 in a certificate of deposit that pays 6%. If Ryan leaves the account alone until the investment doubles, how old will he be? (Assume that the interest is not compounded.)
This one has a twist to it in that it tells you that the interest is not compounded.
They need to earn $8,000 - $4,000 = $4,000 in interest.
They earn $4,000 X 6% = $240 in interest per year.
$4,000 / $240 = 16.67
16.67 + 8 = 24.67
Ryan will be 24 and 8 months old when the investment doubles.
2.)Benjamin has $6000 invested in two accounts. One earns 8% interest per year, and the other pays 7.5% interest per year. If his total interest for the year is $472.50, how much is invested at 8%?
X = the amount invested at 8%
($6,000 - X) = the amount invested at 7.5%
So:
.08X + .075(6,000 - X) = $472.50
Now solve:
.08X + 450 -.075X = $472.50, this reduces to
.005X = $22.50, which finally reduces to
X = $4,500
So $6,000 - X = $1,500
So the answer is: $4,500 is invested at 8%
Test the result
$4,500 X 8% = $360.00
$1,500 X 7.5% = $112.50
$360.00 + $112.50 = $472.50, and you've proved your answer