A mother wants to invest $6000 for her children's education. She invests a portion of the money in a bank certificate of deposit
(CD account) which earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $360, how much money was invested at each rate?
Let us assume the amount of money invested in CD = x Then Amount of money invested in savings bond = 6000 - x Percentage of interest in CD = 4% Percentage of interest in savings bond = 7% Amount of interest gained in 1 year = $360 Now 0.04x + [(6000 - x) * 0.07] = 360 0.04x + 420 - 0.07x = 360 0.03x = 60 x = 2000 Then Amount of money invested in the CD account = $2000 Amount of money invested in savings bond = 6000 - 2000 = 4000 dollars
