Posted by Steph on .
an algebra student won $115,000 in a lottery and wishing to deposit it in savings accounts in two financial institutions. One account pays 7.9% simple interest but only insures $60,000. The second account pays 6.9% simple interest and deposits are insured up to $100,000. Determine the maximum amount of annual interest the student can earn while keeping all money insured.
Put the maximum insured amount (60,000) in the bank paying the higher interest, and the remainder in the other bank.
7.9% x 60,000 + 6.9% x 55,000 = $8535.
All money and earnings will be insured.