A mother wants to invest $ 12,000.00 for her sons education. She invests a portion of the money in a bank certificate of deposit (CD Account) which earns 4% and the remain saving bond that earns 7%. If the total interest earned after a year is 720.00, How much invested in the CD. Round to the nearest cent.
amount invested at 4% --- x
amount invested at 7% ---- 12000-x
.04x + .07(12000-x) = 720
I would multiply each term by 100
4x + 7(12000-x) = 72000
solve for x, it is straightforward form here
To find out how much was invested in the CD account, we can set up a system of equations based on the given information.
Let's assume the amount invested in the CD account is x dollars. Since the total amount invested is $12,000.00, the amount invested in the savings bond would be (12,000 - x) dollars.
Now, we can calculate the interest earned from each investment. The interest earned from the CD account, at a rate of 4%, can be found using the formula: x * 0.04 = 0.04x.
The interest earned from the savings bond, at a rate of 7%, can be calculated as follows: (12,000 - x) * 0.07 = 0.07(12,000 - x).
According to the given information, the total interest earned after a year is $720.00. Therefore, we can set up the following equation based on the above calculations:
0.04x + 0.07(12,000 - x) = 720.
To solve for x, let's simplify the equation:
0.04x + 840 - 0.07x = 720,
-0.03x = -120,
x = 120 / 0.03,
x = 4,000.
Therefore, the mother invested $4,000.00 in the CD account.