Jane invests 5000. She invests some in a CD which earns 4 percent and the rest in a savings bond that earns 7 percent. How much money was invested in CD if total interest earned after one year is 300?

Answer 1

Take a breath, and start thinking of things in mathematical terms

• The amount invested in the CD is unknown, so we can call it X.
• The amount invested in the Savings Bond (SB) is the remainder, so we can call it (5000 - X).
• The interest on the CD for one year is 0.04 times X or 0.04X.
• The interest on the SB for one year is 0.07 times (5000 - X) or 0.07(5000 - X).
• You know the total interest from both for the year is 300, so you now can make an equation:

0.04X + 0.07(5000 - X) = 300

All you need to do is expand the expression and move the variable to one side of the equation and solve for X.

Answer 2

There is no precise answer. The best approximation is 1666.67.