Question

You entered Kente invested a total of $8000. He invested part of the money for 2yr in a stock fund that earned the equivalent of 6.5% simple interest. He put the remaining money in an 18 month certificate of deposit that earned 2.5% simple interest. If the total interest from both investments was $855 , determine the amount invested in each account?

Answer 1

So he invested in stock fund was = $6000

and in certificate of deposit was = $ 2000

Explanation:

Given,

Kente invested part of money for 2 yr in stock fund that earned the equivalent of 6.5 % simple interest.He put remaining money in a 18 month certificate of deposit that earn of 6.5%simple interest.

Let he invested in stock fund be$ x. Remaining money =$(8000-x)

∴He got interest from stock fund was =
`(PRt)/(100)`

=$
`(x*6.5*2)/(100)` [here P =x , R = 6.5% and t = 2 yr]

=$
`\frac{{13 x}}{{100} }`

Again he got interest from deposit was =
`(PRt)/(100)`

=$
`((8000-x)* 2.5*(18)/(12) )/(100)` [here P = (8000-x), R=2.5% and t =
`(18)/(12) yr`]

=$
`((8000-x) * 7.5)/(200)`

According to problem

`\frac{{13 x}}{{100} }+((8000-x) * 7.5)/(200)= 855`

⇔
`(26x + 60000 - 7.5)/(200) =855`

⇔18.5 x =171000 - 60000

⇔x =
`(11100)/(18.5)`

⇔x = 6000

So he invested in stock fund was = $6000

and in certificate of deposit was =$(8000- 6000)= $ 2000