AboutSteve Holleran Expertise I can help with all math questions from basic math to Calculus.
Whether it`s consumer questions, or questions from high school or college students, I have probably dealt with it at some time in my career.
Experience 33 years teaching experience in NJ public schools
Education/Credentials B.S. Mathematics : Wake Forest University 1972
M.S. Mathematics : Monmouth University 1981
Here is my question: An investor has $30,000 to invest at simple interest, one portion at 2% and the other at 5%.
How much must he invest in each account to earn a total return of 4% or $1,200?
I want to try to determine the answers by using the following:
If all of the $30,000 is invested at 2%, this will equal $600. He is now short $600. (Remember the interest must be $1,200.) Any cash removed from the 2% account and invested in the 5% account will earn an extra 3%. How much does he need to invest at the remaining 3% to earn the shortfall of $600?
Try to determine the answer by using a simple non-algebra calculation if possible. I think division may help determine the answer, but I'm not sure.
I thank you for any helpful reply.
Answer Hi Kenneth,
It's really not that hard to do it algebraically:
Let x = amount at 5%, then (30,000 - x) = amt at 2%
Since I = PR,
1200 = .05x + .02(30,000 - x)
1200 = .05x + 600 - .02x
600 = .03x so x = 600 / .02 = 20,000
So, invest $20,000 at 5% and $10,000 at 2% , this gives $1200.
