document.write( "Question 1143007: Two certificates of deposit pay interest at rates that differ by 4%. Money invested for one year in the first CD earns $140 interest. The same principal invested in the other CD earns $280. Find the two rates of interest. \n" ); document.write( "

Algebra.Com's Answer #763761 by math_helper(2461) $\"\"$ $\"About$

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Since the interest rates differ by 4% and the interest amount of the higher rate is exactly double that of the lower, the first CD must pay 4% interest and the other CD must pay 8%.
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document.write( "To see this algebraically: \r
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document.write( " P*r = 140           (1)
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document.write( " P*(r+0.04) = 280    (2)\r
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document.write( "  P*r + 0.04P = 280
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document.write( "  140 + 0.04P = 280  <<< subs for P*r from (1)
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document.write( "        0.04P = 140
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document.write( "            P = 140/0.04 = 3500
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document.write( "    3500*(r+0.04) = 280
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document.write( "          r+0.04 = 280/3500 
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document.write( "          r+0.04 = 0.08  --->  r = 0.04 (= 4%)\r
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