Question

Two investments totaling $37,500 produce an annual income of $2210. One investment yields 6% per year, while the other yields 5% per year. How much is invested at each rate?

Answer 1

a = $33,500 at 6%

b = $4,000 at 5%

Detailed Answer:

37,500 = a + b

b = 37,500 - a

a = 37,500 - b

2,210 = a*6% + b*5%

2,210 = a*6% + 5%*(37,500 - a)

2,210 = a*6% - a*5% + 37,500*5%

2,210 = a*(6% - 5%) + 1,875

335 = a*( 6/100 - 5/100)

335 = a*( 1/100)

a = (335*100)/1

a = $33,500

b = 37500 - a

b = 37500 - 33500

b = 4000

Plug back in to check if the amounts invested at each rate equal $2210:

$2210 = a*6% + b*5%

$2210 = 33500*6% + 4000*5%

$2210 = $2010 + $200

$2210 = $2210