a mother wants to $9000 for her son's future education. She invested a portion of the money in a bank certificate(CD account) which earns 4% and the reminder in a savings bond that earns 7%. If the total interest earned after one year is $540, how much money was invested in the CD account
Assuming 9000 was invested, then if x was at 4%, then 9000-x was at 7%.
.04x + .07(9000-x) = 540
x = 3000
$3000 in CD
$6000 in savings
To find the amount of money invested in the CD account, we can use a system of equations.
Let's assume that the amount invested in the CD account is x dollars, and the remaining amount invested in the savings bond is (9000 - x) dollars.
Now, let's calculate the interest earned from each investment:
Interest earned from the CD account = x * 0.04
Interest earned from the savings bond = (9000 - x) * 0.07
According to the problem, the total interest earned after one year is $540. Therefore, we can set up the equation:
Interest from CD account + Interest from savings bond = Total interest earned
(x * 0.04) + [(9000 - x) * 0.07] = 540
Now, let's solve this equation to find the value of x, which represents the amount invested in the CD account:
0.04x + 0.07(9000 - x) = 540
0.04x + 630 - 0.07x = 540
-0.03x = -90
x = -90 / -0.03
x = 3000
Therefore, the mother invested $3000 in the CD account.