Question

A state employees' pension fund invested a total of one million dollars in two accounts that earned 3.5% and 4.5% annual simple interest. At the end of the year, the total interest earned from the two investments was $39,000. How much was invested at each rate?

Answer 1

Answer:

Let the investment in first account be x and this account is earning 3.5% interest

So Interest on this account is 3.5% of x = 0.035x

So the investment in second account would be (1,000,000-x) and this account is earning 4.5% interest

So the interest on this account is 4.5% of (1,000,000-x) = 0.045*(1,000,000-x)

Given that total interest for the year is $42,000

So we have

0.035x + 0.045(1,000,000-x) = 42,000

0.035x - 0.045x + 0.045*1,000,000 = 42,000

-0.01x + 45,000 = 42,000

-0.01x = 42,000-45,000

-0.01x = - 3000

0.01x = 3000

x = 3000/0.01

x= 3,00,000

Therefore Investment in one account s 300,000 and the investment in other account is 1,000,000-300,000 = 700,000

Explanation:

Hope this helps