# Compound interest!

• May 20th 2008, 04:58 AM
niruja
Compound interest!

A company invests \$5000, some into an account paying 5.2% simple interest and the remainder in an account paying 4.5% simple interest per annum. After 2 years the \$50000 had grown to \$54976. How much went into each account?
• May 20th 2008, 05:02 AM
colby2152
Quote:

Originally Posted by niruja
A company invests \$50000, some into an account paying 5.2% simple interest and the remainder in an account paying 4.5% simple interest per annum. After 2 years the \$50000 had grown to \$54976. How much went into each account?

At time zero, you have: \$\displaystyle (x+y)*50000\$

Where \$\displaystyle x + y =1 \$ as they are percents of the principal that is invested. We'll say x% earns 5.2% simple interest.

After two years we should have:

\$\displaystyle x*50000*(1+2*.052) + y*50000*(1+2*.045) = 54976\$

Dividing by 50000 gives us:

\$\displaystyle 1.104x + 1.09y = 1.09952\$

We also know that \$\displaystyle x + y =1 \$, so now we have two equations with two unknown variables. I believe you can now solve for x and y.