Question

Lydia has half of her investment in stock paying a 7% dividend and the other half in a stock paying 13% interest. If her total annual interest is $410, how much does she have invested?

Answer 1

$4,100

Explanation:

Interest = principal * rate * time

Let entire principal = amount invested = p

Investment A :

Rate, r = 7%, principal = p/2, time, = 1

Investment B :

Rate, r = 13%, principal = p/2, time = 1

Total interest = $4.10

(p/2 * 0.07 * 1) + (p/2 * 0.13 * 1) = 410

0.035p + 0.065p = 410

0.1p = 410

p = 410 / 0.1

p = $4100