Question

An investor decides to invest some cash in an account paying 13% annual interest, and to put the rest in a stock fund that ends up earning 7% over the course of a year. The investor puts $1300 more in the first account than in the stock fund, and at the end of the year finds the total interest from the two investments was $1270. How much money was invested at each of the two rates? Round to the nearest integer.

Answer 1

A percentage is a way to describe a part of a whole. The investment that was put in the account is 6805, while the amount that is invested in the stock is 5505.

What are Percentages?

A percentage is a way to describe a part of a whole. such as the fraction ¼ can be described as 0.25 which is equal to 25%.

To convert a fraction to a percentage, convert the fraction to decimal form and then multiply by 100 with the '%' symbol.

Le the amount that is put into the account is x, while the amount that is invested in the stock market is y. Given the investor puts $1300 more in the first account than in the stock fund, therefore, the equation can be written as,

x - y =1300

x = 1300 + y

Also,  at the end of the year the total interest from the two investments was $1270. Therefore, we can write,

0.13x + 0.07y = 1270

Substitute the value of x from the above,

0.13(1300 + y) + 0.07y = 1270

169 + 0.13y + 0.07y = 1270

0.20y = 1101

y = 5505

substitute the value of y in the first equation,

x - y = 1300

x = 6805

Hence, the investment that was put in the account is 6805, while the amount that is invested in the stock is 5505.

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