Question 271742: If $10,000 and $4,000 are invested such that $1250 is earned in one year and if the rate of interest on the larger investment is 2% more than that of the smaller investment, find the rates of interest
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! x = interest rate on larger investment.
x - .02 = interest rate on smaller investment.
formula you want is:
x * 10000 + (x-.02) * 4000 = 1250
simplify this equation to get:
x * 10000 + x * 4000 - .02 * 4,000 = 1250
simplify and combine like terms to get:
x * 14999 - 80 = 1250
add 80 to both sides of the equation to get:
x * 14000 = 1330
divide both sides by 14000 to get:
x = 1330/14000 = .095
this means that x - .02 = .075
.095 * 10000 + .075 * 4000 = 1250 which is correct, confirming these answers are good.
the rate of interest on the 10,000 is .095 = 9.5%
the rate of interest on the 4,000 is .075 = 7.5%
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