SOLUTION: Two bond funds pay interest at rates that differ by 3%. Money invested for one year in the first fund earns $400 interest. The same amount invested in the other fund earns $520. Fi

Algebra ->  Percentage-and-ratio-word-problems -> SOLUTION: Two bond funds pay interest at rates that differ by 3%. Money invested for one year in the first fund earns $400 interest. The same amount invested in the other fund earns $520. Fi      Log On


   

Question 1166629: Two bond funds pay interest at rates that differ by 3%. Money invested for one year in the first fund earns $400 interest. The same amount invested in the other fund earns $520. Find the lower rate of interest.
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Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
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Two bond funds pay interest at rates that differ by 3%.
Money invested for one year in the first fund earns $400 interest.
The same amount invested in the other fund earns $520.
Find the lower rate of interest. %
:
let A = amt invested in each fund
let r = lower interest rate in decimal form
then
(r+.03) = higher interest rate
:
rA = 400
and
A(r+.03) = 520
rA + .03A = 520
replace rA with 400
400 + .03A = 520
.03A = 520-400
A = 120/.03
A = $4000 is the amt
then
4000r = 400
r = 400/4000
r = .10 or 10 % is the lower interest
;
:
Confirm this by finding the int at the higher rate
.13 * 4000 = 520