Question

On two investments totaling $12,000, Michelle lost 5% on one and earned 7% on the other. If her net annual receipts were $264, how much was each investment?

Answer 1

$4800 in the investment with loss, and $7200 in the investment that gave earnings

Explanation:

Let's name "x" the amount invested that gave her the 55 loss, and 'y' the amount invested that produced the 7% earning. Then we are able to create two equations based on the info:

1) Total amount invested ; x + y = 12000

2) Earned amount: -0.05 x + 0.07 y = 264

Where we replace the percentages by their equivalent decimal forms.

Now use the substitution: y = 12000 - x

in the second equation:

-0.05 x + 0.07 (12000 - x) =264

-0.05 x + 840 - 0.07 x = 264

-0.12 x +840 = 264

840 - 264 = 0.12 x

576= 0.12 x

x = 4800

Therefore, Michelle invested $4800 in the investment that gave a loss, and:

$12000 - $4800 = $7200

in the other one.