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19 September, 19:48

Ryan was 8 when his parents invested $4000 in a certificate of deposit that pays 6%. If Ryan leaves the account alone until the investment doubles, how old will he be? (Assume that the interest is not compounded.

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  1. 19 September, 20:03
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    Ryan was 8 when his parents invested $4000 in a certificate of deposit that pays 6%. If Ryan leaves the account alone until the investment doubles, how old will he be? (Assume that the interest is not compounded.)

    This one has a twist to it in that it tells you that the interest is not compounded.

    They need to earn $8,000 - $4,000 = $4,000 in interest.

    They earn $4,000 X 6% = $240 in interest per year.

    $4,000 / $240 = 16.67

    16.67 + 8 = 24.67

    Ryan will be 24 and 8 months old when the investment doubles.

    2.) Benjamin has $6000 invested in two accounts. One earns 8% interest per year, and the other pays 7.5% interest per year. If his total interest for the year is $472.50, how much is invested at 8%?

    X = the amount invested at 8%

    ($6,000 - X) = the amount invested at 7.5%

    So:

    .08X +.075 (6,000 - X) = $472.50

    Now solve:

    .08X + 450 -.075X = $472.50, this reduces to

    .005X = $22.50, which finally reduces to

    X = $4,500

    So $6,000 - X = $1,500

    So the answer is: $4,500 is invested at 8%

    Test the result

    $4,500 X 8% = $360.00

    $1,500 X 7.5% = $112.50

    $360.00 + $112.50 = $472.50, and you've proved your answer
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