SOLUTION: Two bond funds pay interest at rates that differ by 4%. Money invested for one year in the first fund earns $660 interest. The same amount invested in the other fund earns $880. Fi
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Question 1060102: Two bond funds pay interest at rates that differ by 4%. Money invested for one year in the first fund earns $660 interest. The same amount invested in the other fund earns $880. Find the lower rate of interest.
Answer by jorel555(1290) (Show Source): You can put this solution on YOUR website!
The difference between the yields is 880-660, or 220. The difference between the interest rates is 4%. Let n be the amount invested in the bonds. Then:
.04n=220
n=5500
660/5500=12% as the lower rate of interest. ☺☺☺☺
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