Multiple choice

Mr. Jameson, a high end investor, was looking to invest \$1 million in funds that guarantee some return on his investments with no risk. So he took advice from Matthew, who is a financial expert. He suggested Mr. Jameson to invest some amount in High-Yield Savings Accounts and the remaining amount in Certificates of Deposits, they would give guaranteed return of 5% and 6% annually, respectively. If after one year he earned \$56,000 as an interest amount, then how much did he invest in High-Yield Savings Accounts?

  1. $350,000
  2. $400,000
  3. $460,000
  4. $500,000
  5. $600,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be the amount in High-Yield Savings and (1,000,000 - x) be the amount in CDs. Setting up the equation 0.05x + 0.06(1,000,000 - x) = 56,000 leads to 0.05x + 60,000 - 0.06x = 56,000. Solving for x gives 0.01x = 4,000, so x = 400,000.

AI explanation

Let the amount invested in High-Yield Savings Accounts be x, making the amount in Certificates of Deposit equal to \$1000000 - x. Using the mixture concept, the total interest equation is 0.05x + 0.06(1000000 - x) = 56000. Simplifying this gives 60000 - 0.01x = 56000, meaning 0.01x = 4000, so x equals \$400000. He invested $400000 in High-Yield Savings Accounts.

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