Dave has a three-year college loan for $10,000. The lender charges a simple interest rate of 6 percent. How much interest will h
2 answers:
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Let x represent amount invested in the higher-yielding account.
We have been given that a man puts twice as much in the lower-yielding account because it is less risky. So amount invested in the lower-yielding account would be .
We are also told that his annual interest is $6600 dollars. We know that annual interest for one year will be principal amount times interest rate.
, where,
I = Amount of interest,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
We are told that interest rates are 6% and 10%.
Amount of interest earned from lower-yielding account: .
Amount of interest earned from higher-yielding account: .
Let us solve for x.
Therefore, the man invested $30,000 at 10%.
Amount invested in the lower-yielding account would be .
Therefore, the man invested $60,000 at 6%.