Question

Need help solving this problem: Jamaal is planning to invest up to 23,000 in City Bank or State Bank. He wants to invest at least 1,000 in city bank, but not more than 4,000; since state bank does not insure more than $21,000, he wants to invest no more than this amount in state bank. The interest at city bank is 5%, and the interest at State bank is 12%. How much should he invest in each bank to earn the most interest?

Answer 1

Jamaal should put 21,000 into State Bank and 2,000 into City Bank
Assuming the interest is paid yearly, he should sweep the $2520 he earns at State Bank into City Bank at the end of the year and keep his principal (21000) at State Bank,

Even better - if he can open a 2nd account at State Bank and sweep his earning into that new account.