Question

David deposited $12,000 into two saving accounts bearing simple interest.   One of the accounts has an interest rate of 7% while the other rate is 6%.   If the total interest earned after one year is $800, find the amount deposited into each of the accounts.

Answer 1

In this item, we let x be the amount that is deposited in the account that has a simple interest equal to 7%. With this representation, the amount that is deposited in the account with simple interest of 6% is equal to 12000 - x.

The amount of interest earned from the investment is calculated through the equation,
I = P x (i)
For the first investment,
I = (x)(0.07)
For the second investment,
I = (12000 - x)(0.06)

Adding up the interests,
800 = 0.07x + (0.06)(12000 - x)
The value of x from the equation is 8000.

Therefore, the amount invested to that with 7% interest is $8000 and the amount invested to that with 6% interest is $4,000.