Problema Solution
the annual interest on a $2000 investment exceeds the interest earned on a $1000 investment by $55. The $2000 is invested at a 0.5% higher rate of interest than the $1000. What is the interest rate of each investment?
Answer provided by our tutors
$2,000 is invested at a rate of x as a decimal, where x>=0
$2,000 is invested at a rate of x+0.005
The annual interest on a $2,000 investment exceeds the interest earned on a $1,000 investment by $55:
(x + 0.005)2000 = 1000*x + 55
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click here to see the equation solved for x
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x = 0.045 or 4.5%
$1,000 are invested at a rate of 4.5%.
4.5 + 0.5 = 5%
$2,000 are invested at a rate of 5%.