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 18,000 investment exceeds the interest earned on a 5000 investment by 1148. The 18,000 is invested at a 0.6%0.6% higher rate of interest than the 5000. What is the interest rate of each investment?
Solution
Let's denote the interest rate on the 18000 investment would be x + 0.6.
The problem states that 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 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 18000 investment is 8 + 0.6 = 8.6%.
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