Problema Solution
An investment advisor deposited $50,000 into two simple interest accounts. On the tax-free account the annual
simple interest rate is 7%, and on the money market fund the annual simple interest rate is 13%. How much
should be invested in the money market fund so that both accounts earn the same interest?
a. $32,500 b. $27,500 c. $22,500 d. $17,500
Answer provided by our tutors
Answer: (d) 17500
Solution:
Let he invests x in tax free accountand y in market
then x+y=50000
and 0.07x=0.13y
or x=1.86y
so 2.86y=50000
or y=17482 say 17500