Question

Hank invested a total of $20,000, part at 7% and part at 10%. How much did he invest at each rate if the total interest earned in one year was $1640?

Answer 1

Answer:

We have a total investment of $20,000 in two different amounts A and B.

Then:

A + B = $20,000.

And we know that the interest of the amount A is 7%, and the interest of the amount B is 10%. (i will assume that both interests are yearly interest)

And after one year, Hank earns $1,640 thanks to those interests, then we have that:

(7%/100%)*A + (10%/100%)*B = $1,640

And we can write this as:

0.07*A + 0.1*B = $1,640

Then we have a system of equations:

A + B = $20,000

0.07*A + 0.1*B = $1,640

To solve this, the first step is isolating one of the variables in one of the equations.

Let's isolate A in the first equation:

A + B = $20,000

A = $20,000 - B.

Now we can replace this in the other equation:

0.07*A + 0.1*B = $1,640

0.07*($20,000 - B) + 0.1*B = $1,640

$1,400 - 0.07*B + 0.1*B = $1,640

0.03*B = $1,640 - $1,400 = $240

B = $240/0.03 = $12,000

Then we have:

A = $20,000 - $12,000 = $8,000

Hank invests $12,000 in the 10% account and $8,000 in the 7% one.