Split Fund Interest with Principal of 5000 and Fund 1 = 4% and Fund 2 = 6.5% and Interest Paid = 250

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An investment of 5000 was made one year ago.

Part of the investment was placed into an account paying s interest at 4%

The remainder of the investment was placed into an account paying s interest at 6.5%

After one year, you received a total of 250 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 5000 - x

Calculate Interest Credit for Fund 1

Since Fund 1 credits interest using the simple interest method, we have 0.04x

Calculate Interest Credit for Fund 2

Since Fund 2 credits interest using the simple interest method, we have 0.065(5000 - x)

Set up a grid with fund details:

Calculate x from the grid:

Since both Interest paid columns add up to the total interest earned of 250, we set up an equation

0.04x + 0.065(5000 - x) = 250

0.04x + 325 - 0.065x = 250

325 - 0.025x = 250

Subtract 325 from each side:

325 - 325 - 0.025x = 250 - 325

Cancelling the 325 on the left side, we get:

-0.025x = -75

Divide each side by -0.025

Cancelling the -0.025 on the left side, we get:

x = 3000 ← Fund 1 Investment

This means we should 5000 - 3000 = 2000 into Fund 2

Final Answer