Question

An executive invests $27,000, some at 5% and the rest at 4% annual interest. If he receives an annual return of $1,220, how much is invested at each rate?

Answer 1

The amount invested at 5% is $12,000 whereas the remaining $15,000 was invested at 4%

What is the amount of annual return for each investment?

The amount of annual return for each investment is determined as the amount invested multiplied by the rate of return

Let us assume that y was invested at 5% and the 27000-y, the remainder was invested at 4%

Total annual return=(y*5%)+(27000-y)*4%

Total annual return=0.05y+1080-0.04y

total annual return=0.01y+1080

total annual return=1220

1220=0.01y+1080

1200-1080=0.01y

120=0.01y

y=120/0.01

y=$12,000(invested at 5%)

amount invested at 4%=27000-12000

amount invested at 4%=$15,000

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