Question

In planning her retirement. janet deposits some money at 2.5% interest, with twice as much deposited at 3%. find the amount deposited at each rate if the total annual interest income is $850

Answer 1

For this item, it is assumed that we are to determine the values of money or amounts that are invested in each of the given rates. To solve, we let x be the amount deposited at 2.5%. With this representation, the amount deposited at 3% is 2x. The interest for the investment done is calculated through the equation,
I = P x i
where I is the interest, P is the present value, and i is the interest rate.

Substituting the known values for this item,
850 = (x)(0.025) + (2x)(0.03)

Simplifying,
850 = 0.025x + 0.06x
Further simplification,
850 = 0.085x

The value of x from the equation is $10,000.

ANSWERS:
amount invested with 2.5% interest is $10,000 and
amount invested with 3% interest is $20,000