Question

Phyllis invested $12,500, a portion earning a simple interest rate of 5 1 4 % per year and the rest earning a rate of 5% per year. After one year the total interest earned on these investments was $645.00. How much money did she invest at each rate?

Answer 1

$8000 at 5.25% interest rate and $4500 at 5% interest rate.

Explanation:

Let the amounnt invested at 5.25% be "x" and amount invested at 5% = 12,500-x

The total simple interest after 1 year can expressed below as

SI = x(5.25/100)×1 + (12500-x)×5/100

645= x(5.25/100)×1 + (12500-x)×5/100

645= 0.0525x+ (12500-x)0.05

0.0525x+ 625-0.05x= 645

645-625= 0.0525x-0.05x

20= 0.0025

X= 20/0.0025

X= $8000

amount invested at 5% = 12,500-x

= 12500-8000

= $4500

Therefore, $8000 at 5.25% interest rate and $4500 at 5% interest rate.