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 rr (in decimal form). Then, the annual interest rate for the $1000 investment is r0.005r - 0.005, as it is half a percent lower than rr.

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:

Interest=Principal×Rate\text{Interest} = \text{Principal} \times \text{Rate}

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: 2000×r+1000×(r0.005)=1902000 \times r + 1000 \times (r - 0.005) = 190

Now, solve the equation:

2000r+1000(r0.005)=1902000r + 1000(r - 0.005) = 190

Expanding the terms: 2000r+1000r5=1902000r + 1000r - 5 = 190

Combine like terms: 3000r5=1903000r - 5 = 190

Add 5 to both sides: 3000r=1953000r = 195

Solve for rr: r=1953000=0.065r = \frac{195}{3000} = 0.065

So, the annual interest rate for the $2000 investment is 6.5%. The rate for the $1000 investment, which is 0.5% lower, is: r0.005=0.0650.005=0.06r - 0.005 = 0.065 - 0.005 = 0.06

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:

  1. What would the total interest be if Jason invested $3000 at 6%?
  2. How much interest would Jason earn on a $500 investment at 6% annually?
  3. How would the total interest change if the second rate were 1% lower instead of 0.5% lower?
  4. If Jason invested $1500 at 7%, how much interest would he earn in one year?
  5. 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