Question 1052005: A local credit union offers a certificate of deposit (CD) that returns 2% interest on a money market fund that returns 3% interest. Over the next year, a credit union customer wants to earn $263.50 in interest on an investment of $10,000 between a CD and a money market fund.
How much money will the customer need to invest in the CD?
Answer by addingup(3677)   (Show Source):
You can put this solution on YOUR website! He invests x portion of 10,000 at 2% per year (CD)
He invests 10,000-x at 3% per year (money market)
He wants to earn 263.50 in one year
Let's put it all together:
0.02x+0.03(10,000-x) = 263.50
0.02x+300-0.03x = 263.50
-0.01x = -36.50 Divide both sides by -0.01 and remember -/- = +
x = 3650 is what he needs to invest at 2%
and 10,000-3,650 = 6,350 at 3
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Check:
3,650*0.02 = 73
6,350*0.03 = 190.50
Total . . . .263.50 Correct
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