Question

Ernie deposited $4000 between two savings accounts. One account paid 4% simple interest and the other paid 2%. At the end of one year, Ernie had earned $140 in interest for both accounts. How much money did Ernie deposit in the account that paid 4% interest?

A)$2000


B)$2500
C)$2800
D) $3000

Answer 1

D) $3000

Explanation:

Answer 2

Ernie deposited D.) 3000 to the account that paid 4% interest

Simple interest is computed by multiplying the principal to its rate and term.

SI = P * r * t

Since there are two accounts and two interest rates, I did a trial and error computation. It may be tedious but it gives the correct answer.
Account 1 Interest 4% Account 2 Interest 2% Total Interest
4,000.00 160.00 - - 160.00
3,000.00 120.00 1,000.00 20.00 140.00
2,000.00 80.00 2,000.00 40.00 120.00
1,000.00 40.00 3,000.00 60.00 100.00
0 0 4,000.00 80.00 80.00