Split Fund Interest with Principal of 20000 and Fund 1 = 8% and Fund 2 = 6% and Interest Paid = 900

Principal =
Fund 1 Interest = %
Fund 2 Interest = %
Total Interest paid =
  

An investment of 20000 was made one year ago.

Part of the investment was placed into an account paying s interest at 8%

The remainder of the investment was placed into an account paying s interest at 6%

After one year, you received a total of 900 in interest. How much was invested in each account?

Calculate Principal Amounts for each fund:

For Fund 1, we invest an unknown amount, let us call it x

For Fund 2, the remaining principal is 20000 - x

Calculate Interest Credit for Fund 1

Since Fund 1 credits interest using the simple interest method, we have 0.08x

Calculate Interest Credit for Fund 2

Since Fund 2 credits interest using the simple interest method, we have 0.06(20000 - x)

Set up a grid with fund details:

  Interest PaidPrincipalInterest Rate
Fund 10.08xx8%
Fund 20.06(20000 - x)(20000 - x)6%
Total90020000--

Calculate x from the grid:

Since both Interest paid columns add up to the total interest earned of 900, we set up an equation

0.08x + 0.06(20000 - x) = 900

0.08x + 1200 - 0.06x = 900

1200 + 0.02x = 900

Subtract 1200 from each side:

1200 - 1200 + 0.02x = 900 - 1200

Cancelling the 1200 on the left side, we get:

0.02x = -300

Divide each side by 0.02

0.02x
0.02
=
  
-300
0.02

Cancelling the 0.02 on the left side, we get:

x = -15000 ← Fund 1 Investment

This means we should 20000 - -15000 = 35000 into Fund 2

Final Answer

-15000 into Fund 1
35000 into Fund 2





What is the Answer?
-15000 into Fund 1
35000 into Fund 2
How does the Split Fund Interest Calculator work?
Free Split Fund Interest Calculator - Given an initial principal amount, interest rate on Fund 1, interest rate on Fund 2, and a total interest paid, calculates the amount invested in each fund.
This calculator has 4 inputs.

What 3 formulas are used for the Split Fund Interest Calculator?

Fund 1 investment is x
Fund 2 investment is T - x
Interest paid = Interest Rate * Investment

For more math formulas, check out our Formula Dossier

What 3 concepts are covered in the Split Fund Interest Calculator?

interest
payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate
principal
The amount borrowed on a loan, before interest is charged
split fund interest
Example calculations for the Split Fund Interest Calculator

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