How to Solve Investment Problems Part 4
This is the fourth part of the Solving Investment Problems Series. In this part, we discuss a problem which is very similar to the third part. We discuss an investment at two different interest rates.
Problem
Mr. Garett invested a part of $20 000 at a bank at 4% yearly interest. How much does he have to invest at another bank at a 8% yearly interest so that the total interest of the money is 7%.
Solution and Explanation
Let x be the money invested at 8%
(1) We know that the interest of 20,000 invested at 4% yearly interest is
20,000(0.04)
(2) We also know that the interest of the money invested at 8% is
(0.08)(x)
(3) The interest of total amount of money invested is 7%. So,
(20,000 + x)(0.07)
Now, the interest in (1) added to the interest in (2) is equal to the interest in (3). Therefore,
20,000(0.04) + (0.08)(x) = (20,000 + x)(0.07)
Simplifying, we have
800 + 0.08x = 1400 + 0.07x
To eliminate the decimal point, we multiply both sides by 100. That is
80000 + 8x = 140000 + 7x
8x – 7x = 140000 – 80000
x = 60000
This means that he has to invest $60,000 at 8% interest in order for the total to be 7% of the entire investment.
Check:
$20,000 x 0.04 = $800
$60,000 x 0.08 = 4800
Adding the two interest, we have $5600. We check if this is really 7% of the total investment.
Our total investment is $80,000.
Now, $80,000 x 0.07 = $5600.
Ellalala
July 4, 2019Parang nakakalito yung question…
Mr. Garett invested a part of $20 000 at a bank….
diba dapat only a part of 20 000 kapag ganyan so dapat instead of ‘a part of’
it should have been Mr. Garett invested $20 000. Aalisin yun a part of…
Civil Service Reviewer
July 7, 2019Part kasi hindi nya ininvest lahat sa 4%. Pag inalis mo ang part, ibig sabihin lahat.
Civil Service Reviewer
July 7, 2019Part kasi hindi nya ininvest lahat yung 20k. 🙂