Final answer:
To determine how much was invested in each fund, we use the formula for simple interest and solve for the unknown amount. The student invested $25,000 in the fund with 8.5% and $15,000 in the fund with 10% to achieve a total interest of $3,625 in one year.
Step-by-step explanation:
The student question relates to finding the amounts of money invested in two different funds based on the total investment, the interest rates of each fund, and the total interest earned in one year. Let's define x to be the amount of money invested in the fund with 8.5% simple interest, and let (40000 - x) be the amount invested in the fund with 10% simple interest. Using the formula for simple interest I = PRT (Interest equals Principal times Rate times Time), we can set up the following equation:
8.5/100 * x + 10/100 * (40000 - x) = 3625
Solving for x:
0.085x + 0.10(40000 - x) = 3625
0.085x + 4000 - 0.10x = 3625
-0.015x = -375
x = -375 / -0.015
x = 25000
Therefore, the student invested $25,000 at 8.5% simple interest, and the remaining $15,000 (40000 - 25000) at 10% simple interest.