Skippy has a total of $10,000 to split between two investments. one account offers 4% simple interest, and the other account offers 8% simple interest. for tax reasons, he can only earn $500 in interest the entire year. how much money should skippy invest in each account to earn $500 in interest for the year

Skippy should invest $ 7500 in account offering 4 % interest and $ 2500 in account offering 8 % simple interest

Solution:

Given that Skippy has a total of $10,000 to split between two investments

One account offers 4% simple interest, and the other account offers 8% simple interest

Total interest earned = 500

Number of years = 1

Let the principal with rate of interest 4 % is x

So the principal for rate of interest 8 % is 10000 - x

Total interest earned = simple interest for 4 % interest + simple interest for 8 % interest

Simple interest is given as:

Where "p" is the principal and "r" is the rate of interest and "n" is the number of years

Therefore,

Therefore skippy should invest $ 7500 in account offering 4 % interest

And skippy should invest (10000 - x) = (10000 - 7500) = $ 2500 in account offering 8 % interest

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