Katie invested a total of $4000, part at 2% simple interest and part at 3% simple interest. At the end of 1 year, the investments had earned $95 interest. How much was invested at each rate?

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Dryomys Dryomys · Answer 1 · 2020-03-12T05:50:22+01:00

Answer:

$2,500; $1,500

Explanation:

Given that,

Total amount invested = $4,000

Let the amount invested at 2% be x,

and the amount invested at 3% be (4,000 - x)

Interest earned = $95

Time period = 1 year

Simple interest = Principle × Interest rate × Time period

$95 = (x × 0.02 × 1) + [(4,000 - x) × 0.03 × 1)

$95 = 0.02x + 120 - 0.03x

$95 = -0.01x + 120

0.01x = 120 - 95

0.01x = 25

x = 2,500

Therefore,

Amount invested at 2% = x = $2,500

Amount invested at 3% = (4,000 - x)

= 4,000 - 2,500

= $1,500