a mother wants to invest 5000 for her sons future education. She invests a portion of the money in a bank certificate of deposit which earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $300.00,how much money was invested in the CD account
if there is x in the CD account, then the rest (5000-x) is in the bond. So, just add up the interest:
.04x + .07(5000-x) = 300
To determine how much money was invested in the CD account, let's set up the problem using algebra.
Let's assume the amount invested in the CD account is x dollars. Since the total investment is $5000, the amount invested in the savings bond is $5000 - x.
Now, let's calculate the interest earned on each investment using the given interest rates.
The interest earned on the CD account can be calculated as 4% of x, which is 0.04x dollars.
Similarly, the interest earned on the savings bond is 7% of ($5000 - x), which is 0.07(5000 - x) dollars.
According to the problem, the total interest earned after one year is $300, so we can set up the equation:
0.04x + 0.07(5000 - x) = 300
Now, let's solve for x.
0.04x + 0.07(5000 - x) = 300
0.04x + 350 - 0.07x = 300
-0.03x = -50
x = -50 / -0.03
x = 1666.67
Therefore, approximately $1666.67 was invested in the CD account.