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The annual interest on an $18,000$⁢18,000 investment exceeds the interest earned on a $5000$⁢5000 investment by $1148$⁢1148.  The $18,000$⁢18,000 is invested at a 0.6%0.6% higher rate of interest than the $5000$⁢5000.  What is the interest rate of each investment?

Question

The annual interest on an 18,00018,000⁢18,000 investment exceeds the interest earned on a 50005000⁢5000 investment by 11481148⁢1148.  The 18,00018,000⁢18,000 is invested at a 0.6%0.6% higher rate of interest than the 50005000⁢5000.  What is the interest rate of each investment?

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Solution

Let's denote the interest rate on the 5000investmentasx(inpercent).Therefore,theinterestrateonthe5000 investment as x (in percent). Therefore, the interest rate on the 18000 investment would be x + 0.6.

The problem states that the interest earned on the 18000investmentexceedstheinterestearnedonthe18000 investment exceeds the interest earned on the 5000 investment by $1148. We can express this as an equation:

18000*(x + 0.6)/100 - 5000*x/100 = 1148

Solving this equation will give us the value of x, which is the interest rate on the 5000investment.Theinterestrateonthe5000 investment. The interest rate on the 18000 investment would then be x + 0.6.

Let's solve the equation:

180*(x + 0.6) - 50*x = 1148 180x + 108 - 50x = 1148 130x + 108 = 1148 130x = 1148 - 108 130x = 1040 x = 1040 / 130 x = 8

So, the interest rate on the 5000investmentis85000 investment is 8%, and the interest rate on the 18000 investment is 8 + 0.6 = 8.6%.

This problem has been solved

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