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20 May, 03:38

A $5000 principal is invested in two accounts, one earning 1% interest and the another earning 6% interest. If the total interest for the year is $170, then how much is invested in each account?

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  1. 20 May, 04:06
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    Answer: in the 1% account we have $2600 and in the 6% account we have $2400.

    Step-by-step explanation:

    We have two amounts A and B such that:

    Where A is the amount invested in the 1% earning interest account and B is the amount invested in the 6% earning interest account.

    A + B = $5000,

    If the interest is yearly, then we have that, after one year, the interest is:

    A * (1%/100%) + B * (6%/100%) = $170

    A*0.01 + B*0.06 = $170

    So we have two equations:

    A + B = $5000

    A*0.01 + B*0.06 = $170

    In the first equation we can isolate A and get:

    A = $5000 - B

    and replace it in the other equation:

    ($5000 - B) * 0.01 + B*0.06 = $170

    $50 + B*0.05 = $170

    B*0.05 = $120

    B = $120/0.05 = $2400

    Then A = $5000 - $2400 = $2600.
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