Last year Kareem had $20,000to 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

Zavala

Business

30 December, 11:54

Last year Kareem had $20,000to 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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Oconnor · Answer 1

He invested 14,000 in one account and $6,000 in another.

Explanation:

Let amount invested in one account paying 8% simple interest be x.

Total amount invested = $20,000

Amount invested in another account paying 7% simple interest = 20,000 - x

Total interest = $1,540

Simple interest equation for 1st account = 0.08x

Simple interest equation for 1st account = 0.07 (20,000 - x)

Sum of these two equations is $1,540

Equating above two equations we get,

1,540 = 0.08x + 0.07 (20,000 - x)

1,540 = 0.01x + 1,400

x = $14,000

$14,000 is invested in one account and $6,000 (20,000 - 14,000) is invested in another.