Question

A $5,000 principal is invested in two accounts, one earning 1% interest and another earning 6% interest. If the total interest for the year is 170, then how much is invested in each account

Answer 1

On the first account it was invested $2600 and the second $2400.

Explanation:

The sum of the money interest in the first account "x" and the second account "y" must be equal to $5,000.

First account:

i1 = P*r*t

i1 = x*0.01*1

i1 = 0.01*x

Second account:

i2 = P*r*t

i2 = y*0.06*1

i2 = 0.06*y

The sum of the interest is equal to 170, therefore:

0.01*x + 0.06*y = 170

x + y = 5000

To solve this we must multiply the second equation by (-0.01)

0.01*x + 0.06*y = 170

-0.01*x -0.01*y = -50

0.06*y - 0.01*y = 120

0.05*y = 120

y = 120/0.05 = 2400

x = 5000 - 2400 = 2600