Final answer:
After calculating based on the information given, it was found that George needs to invest an additional $13,080 at 4% simple interest to achieve an overall 5% return on both investments combined. This figure does not match any of the multiple-choice answers provided, indicating there may be an error in the calculation or provided options.
Step-by-step explanation:
When George invested $8,720 in an account that pays 7.5% simple interest and he wants to find out how much additional money must be invested at 4% simple interest for the average return on the two investments to be 5%, we can set up an equation to solve for the unknown amount, let's call it x.
Let the total investment be $8,720 + x. The total interest from both investments should equal the amount you would get if the total investment was earning 5%. So,
0.075 * $8,720 + 0.04 * x = 0.05 * ($8,720 + x)
We can simplify and solve for x:
$654 + 0.04x = 0.05 * $8,720 + 0.05x
$654 + 0.04x = $436 + 0.05x
Now, subtract 0.04x from both sides:
$654 = $436 + 0.01x
Subtract $436 from both sides:
$218 = 0.01x
Divide both sides by 0.01 to find x:
x = $21,800
To find the additional amount that needs to be invested at 4%, we subtract the original amount George invested from x:
x = $21,800 - $8,720 = $13,080
This amount is not one of the answers provided. It is possible that there is a mistake in the calculation or in the information given, but based on the calculation above, $13,080 would be the additional amount that needs to be invested at 4% simple interest to achieve an average return of 5% on the total investment.