Multiple choice

Alex invested a total of \$5,000. Part of the money was invested in a savings account that paid 6 percent simple annual interest, and the rest was invested in a bond that paid 4 percent simple annual interest. If the total interest earned at the end of the first year from these investments was \$240, how much did Alex invest at 6 percent and how much at 4 percent?

  1. \$1,500 at 6% and \$3,500 at 4%
  2. \$2,000 at 6% and \$3,000 at 4%
  3. \$2,500 at 6% and \$2,500 at 4%
  4. \$3,000 at 6% and \$2,000 at 4%
  5. \$3,500 at 6% and \$1,500 at 4%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be amount at 6%, (5000-x) at 4%. 0.06x + 0.04(5000-x) = 240. 0.06x + 200 - 0.04x = 240. 0.02x = 40. x = 2000. So 2000 at 6% and 3000 at 4%.

AI explanation

Using the alligation method, the average interest rate is 240 divided by 5000, which equals 4.8 percent. The ratio of the money invested at 6 percent to the money invested at 4 percent is (4.8 minus 4) to (6 minus 4.8), resulting in 0.8 to 1.2 or 2 to 3. Since the total investment is \$5,000, the amount invested at 6 percent is two fifths of 5000, which is \$2,000, and the remaining $3,000 is invested at 4 percent.

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