Question

A total of $10,000 is invested in two mutual funds. The first account yields 5% and the second account yields 6%. How much was invested in each account if the total interest earned in a year is $575?

Answer 1

Answer:

$2,500 was invested in the first account while $7,500 was invested in the second account

Step-by-step explanation:

Here in this question, we want to find the amount which was invested in each of the accounts, given their individual interest rates and the total amount that was accorded as interest from the two investments

Now, since we do not know the amount invested , we shall be representing them with variables.

Let the amount invested in the first account be $x and the amount invested in the second account be $y

Since the total amount invested is $10,000, this means that the summation of both gives $10,000

Mathematically;

x + y = 10,000 ••••••(i)

now for the $x, we have an interest rate of 5%

This mathematically translates to an interest value of 5/100 * x = 5x/100

For the $y, we have an interest rate of 6% and this mathematically translates to a value of 6/100 * y= 6y/100

The addition of both interests, gives 575

Thus mathematically;

5x/100 + 6y/100 = 575

Multiplying through by 100, we have

5x + 6y = 57500 •••••••••(ii)

From 1, we can have x = 10,000-y

let’s substitute this into equation ii

5(10,000-y) + 6y = 57500

50,000-5y + 6y = 57500

50,000 + y = 57500

y = 57500-50,000

y = 7,500

Recall;

x = 10,000-y

so we have;

x = 10,000-7500 = 2,500