Question

You have $1000 to invest in two different accounts. In order to save the money you need for college, you need to average 6.6 percent interest. If the two accounts pay 5 percent and 7 percent interest, how much should you invest in each account?

A) $800 in 5%, $200 in 7%

b) $400 in 5%, $600 in 7%

C) $200 in 5%, $800 in 7%

D) $500 in 5%, $500 in 7%

Answer 1

Explanation:

C) $200 in 5%, $800 in 7%

Answer 2

B) $400 in 5%, $600 in 7%

Explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 6.6/100

r = 0.066 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 10,000.00(1 + 0.066/12)(12)(7.5)

A = 10,000.00(1 + 0.0055)(90)

A = $16,382.75

Therefore, you will need to invest $400 in 5%, $600 in 7% acoounts