Question

$4,000 is invested at 3% interest. How much money must be invested at 5% interest so that the total interest from the two investments is $195 after a year? $1,250 $1,500 $1,750

Answer 1

4000*0.03=120 interest per year with the 3% investment
195-120=75 wanted additional interest with 5%
75*(100/5)=75*20=$1500 necessary investment

Answer 2

Option 2 - $1500

Explanation:

Given : $4,000 is invested at 3% interest.

To find : How much money must be invested at 5% interest so that the total interest from the two investments is $195 after a year?

Solution : Let x be the amount invested,

Now, we have given that

$4000 invested at 3% in one year the interest is

`I=P* r* t`

`I=4000* (3)/(100)* 1`

`I=\$120`

The total interest from the two investments is $195.

The additional interest with 5% is

$195 - $120 = $75

i.e, The amount or principle value x is,

when interest is $75 rate = 5% and time is 1 year

`75=x* (5)/(100)* 1`

`x=(75* 100)/(5)`

`x=1500`

Therefore, $1500 would have to be invested at 5% to generate a total of $195 from both investments.

Hence, Option 2 is correct.