Question

Lindsay invests $2200 in one account and $1000 in an account paying 4 % higher interest. At the end of one year she had earned $168 in interest. At what rates did she invest?

Answer 1

4% and 8%

Explanation:

You want to know the interest rates that yield $168 on investments of $2200 at one rate and $1000 at a rate 4% higher.

Setup

Let r represent the lower interest rate. Then x+0.04 is the higher rate, and the total interest earned is ...

2200r +1000(r +0.04) = 168

Solution

Simplifying the equation, we have ...

3200r +40 = 168

3200r = 128 . . . . . . . . subtract 40

r = 128/3200 = 0.04 = 4% . . . . . divide by the coefficient of r

The rates of interest on Lindays's investments were 4% and 8%.