Question

Phyllis invested $70,000, earning a portion at a simple interest rate of 4% per year and the rest at a rate of 7% per year. After one year, the total interest earned on these investments was $3970. How much money did she invest at each rate?

a. $40,000 at 4%, $30,000 at 7%
b. $50,000 at 4%, $20,000 at 7%
c. $60,000 at 4%, $10,000 at 7%
d. $30,000 at 4%, $40,000 at 7%

Answer 1

Phyllis invested $31,000 at 4% and $39,000 at 7%. None of the answer is correct

Step-by-step explanation:

Let's assume that Phyllis invested $x at 4% and $(70000 - x) at 7%.

The formula to calculate simple interest is: I = P * r * t, where I is the interest, P is the principal (initial investment), r is the interest rate, and t is the time in years.

Using this formula, we can find the interest earned on the first investment:

I1 = x * 0.04 * 1 = 0.04x

Similarly, we can find the interest earned on the second investment:

I2 = (70000-x) * 0.07 * 1 = 0.07(70000-x)

The total interest earned is given as $3970, so we can set up the following equation:

0.04x + 0.07(70000-x) = 3970

Now we solve for x:

0.04x + 4900 - 0.07x = 3970

-0.03x = 3970 - 4900

-0.03x = -930

x = -930 / -0.03

x = 31000

Therefore, Phyllis invested $31,000 at 4% and $(70,000 - 31,000) = $39,000 at 7%.

None of the answer is correct