Math Problem Statement
Jason invests $2000 at a certain annual interest rate and $1000 at an annual interest rate 1/2 of a percent lower. If he receive a total of $190 interest, at what rate did he invest the $1000?
Solution
Let the annual interest rate for the $2000 investment be denoted as (in decimal form). Then, the annual interest rate for the $1000 investment is , as it is half a percent lower than .
The total interest earned is the sum of the interest from both investments, and we know that the total interest is $190. The interest from an investment can be calculated using the formula:
For the $2000 investment: \text{Interest from $2000} = 2000 \times r
For the $1000 investment: \text{Interest from $1000} = 1000 \times (r - 0.005)
The total interest is given as:
Now, solve the equation:
Expanding the terms:
Combine like terms:
Add 5 to both sides:
Solve for :
So, the annual interest rate for the $2000 investment is 6.5%. The rate for the $1000 investment, which is 0.5% lower, is:
Thus, Jason invested the $1000 at a rate of 6%.
Would you like further clarification or more details?
Here are 5 related questions for practice:
- What would the total interest be if Jason invested $3000 at 6%?
- How much interest would Jason earn on a $500 investment at 6% annually?
- How would the total interest change if the second rate were 1% lower instead of 0.5% lower?
- If Jason invested $1500 at 7%, how much interest would he earn in one year?
- What is the relationship between the principal, rate, and time in calculating interest?
Tip: When solving word problems involving percentages, converting percentages to decimals (e.g., 6% to 0.06) helps simplify calculations.
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Math Problem Analysis
Mathematical Concepts
Algebra
Simple Interest
Linear Equations
Formulas
Interest = Principal × Rate
Theorems
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Suitable Grade Level
Grades 9-11
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