Work the investment problem using simple interest. See Example.EXAMPLE Solving a Simple In...

Work the investment problem using simple interest. See Example.

EXAMPLE Solving a Simple Interest Problem

Susan Grody plans to invest some money at 6% and $2000 more than this amount at 7%. To earn $790 per year in interest, how much should she invest at each rate?

Step 1 Read the problem again. There will be two answers.

Step 2 Assign a variable.

Amount Invested in Dollars	Rate of Interest	Interest for One Year
x	0.06	0.06x
x + 2000	0.07	0.07 (x + 2000)

Use a table to arrange the given information.

Step 3 Write an equation. Multiply amount by rate to get the interest earned.

Step 4 Solve.

Step 5 State the answer. She should invest $5000 at 6% and $5000 + $2000 = $7000 at 7%.

Step 6 Check. Investing $5000 at 6% and $7000 at 7% gives total interest of 0.06($5000) + 0.07 ($7000) = $300 + $490 = $790, as required.

Margaret Fennell won a prize for her work. She invested part of the money in a certificate of deposit at 4% and $3000 more than that amount in a bond paying 6%. Her annual interest income was $780. How much did Margaret invest at each rate?