Thread: Investing money at different rates.

Okay

Sam has $12,000. He invests this money into a savings account and a bond account. The savings account has an interest rate of 4%, while the bond has a rate of 6%. The total interest he collected at the end of the year was $640. how much did he invest into each account? I've done these multiple times in class but I can't get the formula drilled into my brain.

i know that
x+y = 12000
and .04x + .06y = 640

x = savings
y = bond

so y = 12000 - x

.04x + .06(12000 - x) = 640
if i distribute i get..
.04x + 720 - .06x = 640
.04x -.06x = -.02x

-.02x + 720 = 640

this is where I got lost

this is where I got lost.

Originally Posted by qleeq

Okay

i know that
x+y = 12000
and .04x + .06y = 640

x = savings
y = bond

I would write it as


and

Now

so



now solve for x and in turn find y

Originally Posted by pickslides

I would write it as


and

Now

so



now solve for x and in turn find y

why did you change it to 104% when 640 was left the same in the original equation?


then







oh.. thanks lol

Originally Posted by qleeq

why did you change it to 104% when 640 was left the same in the original equation?

I don't understand this comment. I changed the 640 to 12000+640, the invested amount plus the interest.

Originally Posted by pickslides

I don't understand this comment. I changed the 640 to 12000+640, the invested amount plus the interest.

Well.. it was originally 4% and 6% which are .04 and .06 respectively.
so how did you get 1.04 and 1.06? just some elaboration on that is that i'm looking for.

1.04 is the mulitplier for a 4% increase on the original investment.

1.06 is the mulitplier for a 6% increase on the original investment.