Question

The annual interest earned on two investments is $483. One investment is in a 2.1% tax-free annual simple inte account, and the other investment is in a 5.6% annual simple interest CD. The total amount invested is $13,000 how much is invested in each account?

Answer 1

To find the amount invested in each account, set up an equation using the formula for simple interest and solve for the variables.

Step-by-step explanation:

Let's assume the amount invested in the 2.1% tax-free annual simple interest account is x, and the amount invested in the 5.6% annual simple interest CD is $13,000 - x (since the total amount invested is $13,000).

Using the formula for simple interest, we can calculate the interest earned on each investment:

Interest on the 2.1% account = x * 0.021

Interest on the 5.6% CD = ($13,000 - x) * 0.056

Since the total annual interest earned is $483, we can set up the equation: x * 0.021 + ($13,000 - x) * 0.056 = $483

Solving this equation will give us the value of x, which represents the amount invested in the 2.1% account. We can then subtract x from $13,000 to find the amount invested in the 5.6% CD.