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An investment of 4000 was made one year ago.
Part of the investment was placed into an account paying s interest at 10%
The remainder of the investment was placed into an account paying s interest at 15%
After one year, you received a total of 430 in interest. How much was invested in each account?
For Fund 1, we invest an unknown amount, let us call it x
For Fund 2, the remaining principal is 4000 - x
Since Fund 1 credits interest using the simple interest method, we have 0.1x
Since Fund 2 credits interest using the simple interest method, we have 0.15(4000 - x)
Interest Paid | Principal | Interest Rate | |
Fund 1 | 0.1x | x | 10% |
Fund 2 | 0.15(4000 - x) | (4000 - x) | 15% |
Total | 430 | 4000 | -- |
Since both Interest paid columns add up to the total interest earned of 430, we set up an equation
0.1x + 0.15(4000 - x) = 430
0.1x + 600 - 0.15x = 430
600 - 0.05x = 430
600 - 600 - 0.05x = 430 - 600
-0.05x = -170
-0.05x | |
-0.05 |
= |
-170 |
-0.05 |
x = 3400 ← Fund 1 Investment
This means we should 4000 - 3400 = 600 into Fund 2