Question

Taylor has $32000 a part of which he invested at 5% and the remainder at 3%. His annual return on each investment is the same. At what rate would he have to invest all her money to get the same interest?

Answer 1

Taylor have to invest the total money at 3.75%

Step-by-step explanation:

Let the part of money invested at 5% be 'a' and the part of money invested at 3% be (32000-a).

To find (a) :

The annual income for both the 5% and 3% investment is equal.

Interest= (amount x rate of interest x time) /100

Interest for 5% rate on investment

Interest = (a x 5 x 1) /100

Interest for 3% rate on investment

Interest = [(32000-a) x 3 x 1]/100

Both the interests are equal so equate both the equations.

(a x 5 x 1) /100 = [(32000-a) x 3 x 1] /100

5a = (32000-a) 3

5a = 96000-3a

8a = 96000

a = 96000/8

a = 12000

32000-a = 32000-12000

= 20000

The amount invested at 5% is $12000 and invested $20000 at 3%

Interest = (12000 x 5 x 1) /100

= 60000/100

= $600

Interest = (20000 x 3 x 1) /100

= 60000/100

= $600

Total interest = $1200

To find the rate at which the total money is to be invested to get the same annual income.

1200 = (32000 x rate x 1) /100

1200 x 100 = 32000 x rate x 1

120000 = 32000 x rate

120000/32000 = rate

Rate = 3.75%

Taylor have to invest the total money at 3.75% to get the same annual income