A mother wants to invest 1300000 for her sons future educati

A mother wants to invest $13,000.00 for her son\'s future education. She invests a portion of the money in a bank certificate of deposit (CD account) which earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $780.00 how much money was invested in the CD account?

Solution

She invests a portion of the money in a bank certificate of deposit (CD account) which earns 4%

Let $x be deposited in CD account:

= x*0.04*1

and the remainder in a savings bond that earns 7%:

= ( 13,000 -x)0.07

= 910 - 0.07x

So, total interest:

0.04x +910 -0.07x = $780.00

-0.03x +910 = 780

x = $4333.33 was invested in CD account