An investment of 25000 was made one year ago.
Part of the investment was placed into an account paying s interest at 6%
The remainder of the investment was placed into an account paying s interest at 3%
After one year, you received a total of 1200 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 25000 - x
Calculate Interest Credit for Fund 1
Since Fund 1 credits interest using the simple interest method, we have 0.06x
Calculate Interest Credit for Fund 2
Since Fund 2 credits interest using the simple interest method, we have 0.03(25000 - x)
Set up a grid with fund details:
| Interest Paid | Principal | Interest
Rate |
Fund 1 | 0.06x | x | 6% |
Fund 2 | 0.03(25000 - x) | (25000 - x) | 3% |
Total | 1200 | 25000 | -- |
Calculate x from the grid:
Since both Interest paid columns add up to the total interest earned of 1200, we set up an equation
0.06x + 0.03(25000 - x) = 1200
0.06x + 750 - 0.03x = 1200
750 + 0.03x = 1200
Subtract 750 from each side:
750 - 750 + 0.03x = 1200 - 750
Cancelling the 750 on the left side, we get:
0.03x = 450
Divide each side by 0.03
Cancelling the 0.03 on the left side, we get:
x = 15000 ← Fund 1 Investment
This means we should 25000 - 15000 = 10000 into Fund 2
Final Answer
15000 into Fund 1
10000 into Fund 2
You have 2 free calculationss remaining
What is the Answer?
15000 into Fund 1
10000 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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