Question

Last year Nina invested $6,000. She put some of it in a CD the paid 4% simple interest, and she put the rest of it in a savings account that earned 2.5% simple interest. At the end of the year she earned a total of $204 interest. How much did she invest in each account?

Answer 1

She invested $2,400 in the 2.5% account and $3,600 in the 4% simple interest account

Explanation:

Here, we want to know the amount of money invested in each account

Let the amount invested in the 4% interest account be $x while the amount invested in the 2.5% account be $y

So mathematically;

x + y = 6,000 ••••••(i)

Let’s now calculate the interest

for the 4% account , interest = 4/100 * x = 4x/100

For the 2.5% account, interest = 2.5/100 * y= 2.5y/100

The addition of both gives the total interest;

4x/100 + 2.5y/100 = 204

Multiply through by 100

4x + 2.5y = 20,400 •••••••(ii)

From i, x = 6,000 - y

insert this into equation ii

4(6,000-y) + 2.5y = 20,400

24,000 - 4y + 2.5y = 20,400

24,000-20,400 = 4y - 2.5y

1.5y = 3,600

y = 3,600/1.5

y = $2,400

Recall;

x = 6000 - y

x = 6,000 - 2,400

x = $3,600