Question

Two investments totaling $57,500 produce an annual income of $4245. One investment yields 8% per year, while the other yields 7% per year. How much is invested at each rate?

Answer 1

The difference between those two amounts is $575.

The difference between the actual amount of interest and the amount of interest at 7% is $4245-$4025 = $220.

So the amount of actual interest is 220/575 of the way from 7% to 8%; that means 220/575 of the total was invested at the higher rate of 8%. Since the total amount was $57,500, the amount invested at 8% was $22,000; that means the amount invested at 7% was $57,500-$22,000 = $35,500.