Problema Solution
If $10,000 and $4,000 are invested such that $1250 is earned in one year, and the rate of interest of the larger investment
is 2% more than the smaller investment, find the rates of interest?
Answer provided by our tutors
let
r1 = the rate of interest of the $10,000 investment
r2 = the rate of interest of the $4,000 investment
the rate of interest of the larger investment is 2% more than the smaller investment
r1 = r2 + 0.02
$1250 is earned in one year
10000*r1 + 4000*r2 = 1250
by solving the system of equations
r1 = r2 + 0.02
10000*r1 + 4000*r2 = 1250
we find
r1 = 0.095 or 9.5%
r2 = 0.075 or 7.5 %
click here to see the step by step solution of the system of equations
the rates of interest are:
9.5% for the $10,000 investment
7.5% for the $4,000 investment