A mother earned $8750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balan
ce will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $420.00, how much money was invested at each rate?
The problem statement is not clear regarding which money is invested. We will assume it is the 80% of $8750 that is set aside for future education. That amount is
... 0.80 × $8750 = $7000
If x represents the amount invested at 7%, then the total interest earned is
