Split Fund Interest with Principal of 7000 and Fund 1 = 7% and Fund 2 = 9% and Interest Paid = 550
An investment of 7000 was made one year ago. Part of the investment was placed into an account paying s interest at 7% The remainder of the investment was placed into an account paying s interest at 9% After one year, you received a total of 550 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 7000 - x
Calculate Interest Credit for Fund 1
Since Fund 1 credits interest using the simple interest method, we have 0.07x
Calculate Interest Credit for Fund 2
Since Fund 2 credits interest using the simple interest method, we have 0.09(7000 - x)
Set up a grid with fund details:
Interest Paid
Principal
Interest
Rate
Fund 1
0.07x
x
7%
Fund 2
0.09(7000 - x)
(7000 - x)
9%
Total
550
7000
--
Calculate x from the grid:
Since both Interest paid columns add up to the total interest earned of 550, we set up an equation 0.07x + 0.09(7000 - x) = 550 0.07x + 630 - 0.09x = 550 630 - 0.02x = 550
Subtract 630 from each side:
630 - 630 - 0.02x = 550 - 630
Cancelling the 630 on the left side, we get:
-0.02x = -80
Divide each side by -0.02
-0.02x
-0.02
=
-80
-0.02
Cancelling the -0.02 on the left side, we get:
x = 4000 ← Fund 1 Investment This means we should 7000 - 4000 = 3000 into Fund 2
Final Answer
4000 into Fund 1 3000 into Fund 2
What is the Answer?
4000 into Fund 1 3000 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?
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
