Question

Please help for 50 points.

The Smith and Jones manufacturing company keeps a third of its cash in the bank, which pays 0.5% interest, and the other two-thirds in long-term investments that give 3.5% interest. If the company earned a total of $37,500 in interest last year, how much cash did they keep in the bank?

Answer 1

Answer: $937,500

Explanation:

Let's have x represent the amount of cash. One portion of it pays 0.5%, so 0.005x; the other portion pays 3.5%, so 0.035x. This gives us:

0.005x + 0.035x = 37500

We do some combining like terms:

0.040x = 37500

Solve for x:

x = (37500)/(0.04)

x = 937500

Therefore, the company started with $937,500.