Question

$5,000 is invested at 3% interest. How much money must be invested at 5% interest so that the total interest from the two investments is $275 after one year? $2,000 $2,500 $3,000

Answer 1

given that

$5000 is invested at 3% interest

so Interest earned by 5000 after 1 year

= 3% of 5000 = (3 × 5000)/100 = $150

total interest required = $275

remaining interest required = 275 - 150 = $125

let x be the required amount to be invested at 5%

⇒ 5% of x should be 125

⇒ (5/100) × x = 125

⇒ x = 125 × 20 = $2500

hence $5,000 invested at 3% and $2500 invested at 5% will yield interest of $275