Question

3) John has decided to invest his $20,000 in two saving accounts. He decides to invest some of it at 4.5% annual interest and the rest of it at 2.5% annual interest. After one year, his total interest from both accounts is $750. How much did he invest in each account?

Answer 1

The amount he invested in the account that yields 4.5% interest is $7,500.

The amount he invested in the account that yields 2.5% interest is $12,500.

What is the system of equations that represent the question?

a + b = $20,000 equation 1

0.045a + 0.025b = $750 equation 2

Where:

a = amount he invested in the account that yields 4.5% interest

b = amount he invested in the account that yields 2.5% interest

How much was invested in the account that yields 4.5% interest?

Multiply equation 1 by 0.025

0.025a + 0.025b = 500 equation 3

Subtract equation 3 from 2

250 = 0.02a

a = 12,500

How much was invested in the account that yields 4.5% interest?

Subtract 12,500 from 20,000

20,000 - 12,500 = $7,500

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