SOLUTION: This one is a tough one. A mother earned $8750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her so

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Question 975989: This one is a tough one.
A mother earned $8750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $420.00, how much money was invested at each rate? How much money was invested in the CD account?
Answer by solver91311(24713) About Me  (Show Source):
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She started with $8750, 20% of which is $1760 for the downpayment leaving $6990 to invest.

Let represent the amount invested at 7%, then since it was all invested one place or the other the amount invested at 4% had to be .

The return on the 7% investment is then and the return on the investment is then , and the sum of these two amounts is $420.

So:



Solve for , then calculate

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John

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