Question

John had 30,000 to invest. he invested part of his money and bonds paying 12 percent annual simple interest and the rest of the money in a savings account giving 4% annual interest at the end of the year, he received $2400 as extra income how much money did John place in each investment?

Answer 1

Let the amount that John placed in bonds be
`x`. Then, the amount that he placed in the savings account has to be
`\$30,000 - x`. Using those as the investment amounts, the total extra income is given by adding the two separate interests as shown:


`.12x + .04(\$30,000 - x) = \$2,400`

We can now solve for x:


`.12x + .04(\$30,000 - x) = \$2,400`

`.12x + (\$1,200 - .04x) = \$2,400`

`.08x + \$1,200 = \$2,400`

`.08x = \$1,200`

`x = \$15,000`

Thus, the amount that John put in each investment is

Bonds:
`x = \$15,000`
Savings account:
`\$30,000 - x = \$30,000 - \$15,000 = \bf \$15,000`