Question

A mother earned ​$ 7500.00 from royalties on her cookbook. she set aside​ 20% of this for a down payment on a new home. the balance will be used for her​ son's future education. she invests a portion of the money in a bank certificate of deposit​ (cd account) that earns​ 4% and the remainder in a savings bond that earns​ 7%. if the total interest earned after one year is ​$ 360.00​, how much money was invested at each​ rate?

Answer 1

Amount of money deposited in the two accounts is 80% of 7500$.
Amount of money in the two accounts = 0.8 * 7500 = 6000$

Now assume that the amount deposited in CD account is m and the amount deposited in the saving bond is n.
m + n = 6000 
Therefore: m = 6000 - n ................> equation I

Now we write another equation expressing the savings:
0.04m + 0.07n = 360 ............> equation II

Substitute with equation I in equation II:
0.04 (6000-n) + 0.07n = 360
240 - 0.04n + 0.07n = 360
0.03n = 120
n = 4000 $

Substitute with n in equation I to get the value of m as follows:
m = 6000 - n = 6000 - 4000 = 2000

Based on these calculations:
The amount of money deposited in the CD = 2000$
The amount of money deposited in the saving account = 4000$