Use the simple interest formula.
-How can $56,000 be invested, part at 4% annual simple interest and the remainder at 10% annual simple interest, so that the interest earned by the two accounts is equal at the end of the year?
A) $16,000 invested at 4%; $40,000 invested at 10%
B) $26,000 invested at 4%; $30,000 invested at 10%
C) $40,000 invested at 4%; $16,000 invested at 10%
D) $30,000 invested at 4%; $26,000 invested at 10%

Question

Quizplus · Accepted Answer

Let x be the amount invested at 4% and 56000-x be the amount invested at 10%. Then, the interest earned by the 4% account is 0.04x and the interest earned by the 10% account is 0.10(56000-x). We want the interest earned to be equal, so:

0.04x = 0.10(56000-x)
0.04x = 5600 - 0.10x
0.14x = 5600
x = 40000

Therefore, $40,000 should be invested at 4% and $16,000 should be invested at 10%. This makes the interest earned by both accounts equal, as shown below:

0.04(40000) = 1600
0.10(16000) = 1600

Use the Simple Interest Formula