Question

Tony has a total of $12,500 in two accounts. One account pays 2% simple interest per year and the other pays 5% simple interest. If he earned $370 in interest in the first year, how much did he invest in each account?​

Answer 1

y=4000 at 5%

x=8500 at 2%

Explanation:

We know the total amount of money invested. $12500

x+y=12500,

We know that the total interest for the year for the two accounts is $370

0.02*x+0.05*y=370

x=12500-y

We substitute for x

0.02*(12500-y)+0.05*y=370

We multiply out

250-0.02y+0.05*y=370

We combine like terms.

0.03*y=120

Isolate y

y=4000 at 5%

x=12500-y

Calculate x

x=8500 at 2%

We check

0.02*8500+0.05*4000=370

170+200=370

370=370

Since this statement is TRUE and neither amount is negative then it is ok