Question

Phoebe invests her savings in two accounts, one paying 2% and the other paying 4% simple interest per year.

She puts thrice as much in the lower-yielding account because it is less risky.

Her annual interest is $250 dollars.

How much is her total investment?

Answer 1

Let the amount invested in high yeilding account(4%) be $x.

So, the amount invested in low yeilding account(2%) be $3x.

Total annual interest = $250

So, the equation would be =

(4% * $x) + (2% * $3x) = $250

= $0.04x + $0.06x = $250

= $0.1x = $250

= x = $2500

So, we can conclude the $2500 were invested in high yeilding account, which yeilds 4% and $2500*3 = $7500 were invested in low yeilding account, which yeilds 2%.

Total amount invested = $2500 + $7500

= $10000.

So, her total investment = $10000.

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