SOLUTION: a designer invest $20,000.0 in two CDs. the first CD pays 11% per annum simple interest, and the second pays 12.5%. at the end of on year she has earned 2320.0 in interest.
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Question 718466: a designer invest $20,000.0 in two CDs. the first CD pays 11% per annum simple interest, and the second pays 12.5%. at the end of on year she has earned 2320.0 in interest.
* how much did she invest in each CD?
* what was the effective interest rate on the total investments? Answer by mananth(16946) (Show Source):
You can put this solution on YOUR website! CD I 11.00% per annum ------------- Amount invested =x
CD II 12.50% per annum ------------ Amount invested = y
20000
Interest----- 2320
CD I 11.00% per annum ---x
CD II 12.50% per annum ---y
Total investment
x + 1 y= 20000 -------------1
Interest on both investments
11.00% x + 12.50% y= 2320
Multiply by 100
11 x + 12.5 y= 232000.00 --------2
Multiply (1) by -11
we get
-11 x -11 y= -220000.00
Add this to (2)
0 x 1.5 y= 12000
divide by 1.5
y = 8000
CD I 11.00% $ 12000
CD II 12.50% $ 8000
