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1 September, 16:59

A mother wants to invest $12 comma 000.00 for her son's future 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 $ 720.00 comma how much money was invested in the CD account?

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  1. 1 September, 17:07
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    A = $4000

    Explanation:

    given dа ta:

    total investment $12000

    interest on CD = 4%

    Interest on bond = 7%

    the portion invested in the CD is A

    total portion invested as a bond = $12,000 - A

    total portion earned on the CD = 0.04A.

    The total interest gain on the bond = 0.07 (12000 - A).

    equation for the total interest earned is:

    0.04A + 0.07 (12000 - A) = 720

    0.04A + 840 - 0.07A = 720

    -0.03A = - 120

    A = $4000
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