Help on 'investment' word problem: $22K invested in 2 accts

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harleyload
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Help on 'investment' word problem: $22K invested in 2 accts

Postby harleyload » Fri Mar 20, 2009 6:48 pm

A man invests $22,000 into two accounts. One account pays 6% simple interest and the other pays 7% simple interest. The annual interest earned is $1,420. How much is invested in each account?

I got the answer by guessing. I can't seem to figure out how to put this into an equation format.

Any help would be greatly appreciated.

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stapel_eliz
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Postby stapel_eliz » Fri Mar 20, 2009 7:48 pm

harleyload wrote:A man invests $22,000 into two accounts. One account pays 6% simple interest and the other pays 7% simple interest. The annual interest earned is $1,420. How much is invested in each account?

To learn how to set this up and solve it, try this lesson on "investment" word problems.

Once you've learned the basic terms and techniques, you'll see how to set up the grid:

+----------+-----------+------+---+-----------------+
|##########| P * r * t = I |
+----------+-----------+------+---+-----------------+
| 6% acct. | x | 0.06 | 1 | 0.06x |
+----------+-----------+------+---+-----------------+
| 7% acct. | 22000 - x | 0.07 | 1 | 0.07(22000 - x) |
+----------+-----------+------+---+-----------------+
| total | 22000 |######| 1 | 1420 |
+----------+-----------+------+---+-----------------+

Note that the expression for the amount of the principal P invested in the 7% account comes from translating the fact that, after "x" of the total was put into the other account, only (total) - x remained for the 7% account. :wink:

Since the total interest earned was the sum of the interest on each of the two investments, add the two "interest" expressions, and set equal to the given total. Then solve the resulting linear equation for the value of "x". Back-solve for the other investment amount.

If you get stuck, please reply showing how far you have gotten. Thank you! :D


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