View Full Version : Interest Problem: how much should be invested so...?

SCSmith

05-29-2006, 12:22 AM

An investment club invested $13,600 into two wimple interest accounts. On one account, the annual simple interest rate is 4.2%. On the other, the annual simple interest rate is 6%. How much should be invested in each account so that both accounts earn the same annual interest?

|=========|============|=======|================== =|

| | P | r | I |

|=========|============|=======|================== =|

| acct #1 | x | 0.042 | 0.042x |

|---------|------------|-------|-------------------|

| acct #2 | 13,600 - x | 0.06 | 0.006(13,600 - x) |

|=========|============|=======|================== =|

0.042x + 0.06(13,600 - x) = $27,200

0.042x + 816 - 0.06x = 27,200

0.036x = 26,834

x =

stapel

05-29-2006, 12:33 AM

Your equation says that you expect the interest to sum to twice the originally-invested amount. Are you sure this is what you want?

Eliz.

SCSmith

05-29-2006, 04:43 AM

The only other equation I can think of at this time is:

.042x=.006(13,600 - x)

.042x = 816 - .006x

.048x = 816

x = 17000

Mrspi

05-29-2006, 10:00 AM

The only other equation I can think of at this time is:

.042x=.006(13,600 - x)

.042x = 816 - .006x

.048x = 816

x = 17000

Obviously, you've got an error here, since there's only $13,600 to be invested.

However, your idea for how to set up the equation is correct; each of the accounts are supposed to earn the same amount of interest. Your error is in using 0.006 for the interest rate on the right-hand side. In the chart you displayed in your original post, you correctly used 0.06:

.042x = .06(13600 - x)

Try this equation, and see if you get a more reasonable answer! Then, CHECK your answer to see if both accounts will earn the same amount of interest.

SCSmith

05-30-2006, 04:57 AM

I don't see another way to set up the equation.

.006(13,600 -x) = .042x

81.6 - .006x = .042x

81.6 = .048x

1700 = x

stapel

05-30-2006, 09:10 AM

As suggested by the earlier reply, you might want to reconsider using "0.006" for "six percent".

Eliz.

Denis

05-30-2006, 02:30 PM

I don't see another way to set up the equation.

.006(13,600 -x) = .042x

Smitty, do you take the time to READ replies?

You were told that .006 is WRONG and should be .06; are you tired or something?

SCSmith

06-03-2006, 02:33 AM

.042(13600)=.06(13600-x)

571.20=816-.06x

-244.80=-.06x

x=4080

13600-4080=9520

Correct answer is 4.2%=$8000 and 6%=$5,600

Denis

06-03-2006, 07:00 AM

.042(13600)=.06(13600-x)

WHY did you change .042x to .042(13600) ? :evil:

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