Last year Kareem had $ 20, 000 to invest. He invested some of it in an account that paid 8 % simple interest per year, and he invested the rest of it in an account that paid 7 % simple interest per year. After one year, he received a total of $ 1540 in interest. How much did he invest in each account?

Question

Arturo Ingram

Business

13 February, 17:56

Last year Kareem had $ 20, 000 to invest. He invested some of it in an account that paid 8 % simple interest per year, and he invested the rest of it in an account that paid 7 % simple interest per year. After one year, he received a total of $ 1540 in interest. How much did he invest in each account?

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Answers (1)

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Royce Sharp · Answer 1

Kareem invested $14,000 in account paying 8% simple interest and $6,000 in account paying 7% simple interest.

Explanation:

W1 = weight of money invested in account paying 8% simple interest

W2 = (1 - W1) = weight of money invested in account paying 7% simple interest

W1 + W2 = 1

Total money invested = $20,000

Total interest earned = $1,540

$20,000 (W1) = Total money invested in account paying 8% simple interest

$20,000 (W2) = Total money invested in account paying 7% simple interest

[20000 (W1) x 8% ] + [20000 (W2) x 7%] = 1540

1600 (W1) + 1400 (1 - W1) = 1540

W1 = 0.7

W2 = 1 - W1

W2 = 1 - 0.7 = 0.3

20000 (W1) = 20000 (0.7) = $14,000

20000 - 14000 = $6000

Kareem invested $14,000 in account paying 8% simple interest and $6,000 in account paying 7% simple interest.