Answer: he invested $8000 at 5%
Step-by-step explanation:
Let x represent the amount which he invested in the account paying 8% interest.
Let y represent the amount which he invested in the account paying 5% interest.
Mr. Smith invest a certain amount of money at 8% interest and twice as much at 5% . This means that
xmy = 2x
The formula for determining simple interest is expressed as
I = PRT/100
Considering the account paying 8% interest,
P = $x
T = 1 year
R = 8℅
I = (x × 8 × 1)/100 = 0.08x
Considering the account paying 5% interest,
P = $y
T = 1 year
R = 5℅
I = (y × 6 × 1)/100 = 0.05y
His annual income from the two Investments is $720 it means that
0.08x + 0.05y = 720 - - - - - - - - - -1
Substituting y = 2x into equation 1, it becomes
0.08x + 0.05 × 2x = 720
0.08x + 0.1x = 720
0.18x = 720
x = 720/0.18
x = 4000
y = 2x = 2 × 4000
y = $8000
