document.write( "Question 1148290: Two certificates of deposit pay interest at rates that differ by 4%. Money invested for one year in the first CD earns $350 interest. The same principal invested in the other CD earns $550. Find the two rates of interest. \n" ); document.write( "

Algebra.Com's Answer #769671 by ikleyn(52787) $\"\"$ $\"About$

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document.write( "If  P  is the value of the principal amount (which is the same in both certificates),\r\n" );
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document.write( "then from the condition you have these two equations\r\n" );
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document.write( "    350 = P*r           (1)\r\n" );
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document.write( "    550 = P*(r+0.04)    (2)\r\n" );
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document.write( "where \"r\" is the unknown smaller rate.\r\n" );
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document.write( "Subtract equation (1) from equation (2).  You will get\r\n" );
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document.write( "    200 = P*0.04.\r\n" );
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document.write( "Hence, the principal is  P =  = 5000 dollar.\r\n" );
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document.write( "Now from equation (1) you can find the smaller rate\r\n" );
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document.write( "    350 = 5000*r,\r\n" );
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document.write( "    r =  = 0.07.\r\n" );
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document.write( "ANSWER.  The lower rate is 7%.  The higher rate is 11%.\r\n" );
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