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Here is the question for my homework:

A mother wants to invest 7000 USD 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 $420.00, how much money was invested in the CD account?

Now, here is my steps:

Amount invested in the savings bond can be represented as 7000 - x

The interest earned in one year on the CD account is 0.04x

So, the interest earned on the savings bond in one year can be represented as: 0.07(7000-x)

The total interested earned after one year is 420.00 USD

The equation is now 0.04x+0.07(7000-x) = 420.00

Now to SIMPLFY it.

I have this so far

n - 420.00 = 0.03x

How do I get the number N?

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Shouldn't your n just be the .07*7000 that you left out in your last line? – jericson Oct 3 '10 at 21:24
@Dan: The solution of your eq. $0.04x+0.07(7000-x)=420.00$ is $x=\frac{7000}{3}\approx 2333.33$. Since the LHS, $0.04x+0.07(7000-x)=490.0-0.03x$, you have the equivalent eq. $490.0-0.03x=420.00$ or $490.0-420.00=0.03x$, the solution of which is $x=\frac{490.0-420.00}{0.03}=\frac{7000}{3}\approx 2333.33$ USD. – Américo Tavares Oct 3 '10 at 21:55

1 Answer

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I'm not sure what n is supposed to represent but instead of it you should still have that 7000*.07. Now you are left with just a number on the left and you can proceed to solve for x. $$.07(7000)-420.00 = 0.03x$$

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YEs, I got that now. How do you solve this? – Dan Oct 3 '10 at 21:31
I mean what do I do now? – Dan Oct 3 '10 at 21:36
Well you should be able to simplify the left hand side to just a number and so to get x by itself you will then divide both sides by .03. Does this help? If not what are you getting stuck on? From your original question you seem to have a pretty good idea of what is going on and what you need to do. – jericson Oct 3 '10 at 21:39
OK so then I do .07(7000) which gets me 490 and then I do 490-420 which gets me 70 and FINALLY I do 70/.03 which gets me the answer of 2333.33 ! :D – Dan Oct 3 '10 at 21:44
Yes! :) So to summarize she will invest 2333.33 in the CD account and the rest (7000-2333.33) in savings bonds to earn exactly 420 dollars of interest in a year. – jericson Oct 3 '10 at 21:47
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