# Interest Problems

These problems are based on the formula

INTEREST = AMOUNT Ã— TIME Ã— RATE

Often, the key to these problems is that the interest earned from one account plus the interest earned from another account equals the total interest earned:

Total Interest = (Interest from first account) + (Interest from second account)

An example will illustrate.

Example

A total of $1200 is deposited in two savings accounts for one year, part at 5% and the remainder at 7%. If$72 was earned in interest, how much was deposited at 5%?

1. 410
2. 520
3. 600
4. 650
5. 760
Solution

Let x be the amount deposited at 5%.
Then 1200 â€“ x is the amount deposited at 7%.
The interest on these investments is .05x and .07(1200 â€“ x).
Since the total interest is \$72, we get

.05x + .07(1200 â€“ x) = 72
.05x + 84 â€“ .07x = 72
â€“.02x + 84 = 72
â€“.02x = â€“12
x = 600