Question

A recent college graduate took advantage of his business education and invested in three investments immediately after graduating. He invested $80,500 into three accounts, one that paid 4% simple interest, one that paid 3 1/8% simple interest, and one that paid 2 1/2% simple interest. He earned $2,670 interest at the end of one year. If the amount of money invested in the third account is x, how much was invested in each account?

Answer 1

To find the amount invested in each account, set up equations based on the interest rates and solve for the unknown. The amount invested in the third account is $20185, and the amounts invested in the first and second accounts are $60315 and $20185 respectively.

Step-by-step explanation:

Let's solve this problem by setting up equations for each investment account.

Let x be the amount invested in the third account.

The first account, paying 4% simple interest, would earn 0.04x in interest.

The second account, paying 3 1/8% simple interest, would earn 0.03125(80500 - x) in interest.

The third account, paying 2 1/2% simple interest, would earn 0.025x in interest.

The total interest earned is $2670:

0.04x + 0.03125(80500 - x) + 0.025x = 2670

Simplifying the equation, we get:

0.125x = 2523.125

Dividing both sides of the equation by 0.125, we find that x = 20185.

Therefore, $20185 was invested in the third account. To find the amount invested in the other accounts, subtract x from the total investment of $80500:

Amount invested in first account = $80500 - $20185 = $60315

Amount invested in second account = $80500 - $60315 = $20185