Question

A $5000 principal is invested in two accounts, one earning 1% interest and the another earning 6% interest. If the total interest for the year is $170, then how much is invested in each account?

Answer 1

Answer: in the 1% account we have $2600 and in the 6% account we have $2400.

Step-by-step explanation:

We have two amounts A and B such that:

Where A is the amount invested in the 1% earning interest account and B is the amount invested in the 6% earning interest account.

A + B = $5000,

If the interest is yearly, then we have that, after one year, the interest is:

A*(1%/100%) + B*(6%/100%) = $170

A*0.01 + B*0.06 = $170

So we have two equations:

A + B = $5000

A*0.01 + B*0.06 = $170

In the first equation we can isolate A and get:

A = $5000 - B

and replace it in the other equation:

($5000 - B)*0.01 + B*0.06 = $170

$50 + B*0.05 = $170

B*0.05 = $120

B = $120/0.05 = $2400

Then A = $5000 - $2400 = $2600.