The Two Bank CDs
13) With $15,000, George bought two CDs from two different banks.
One would pay 3% annual interest, while the other would pay 5%.
If his total interest earnings for the year were $650 from these
two CDs, then how much had he invested in each one?
"x" = will be the value of the 3% CD
Therefore, "15,000-x" will be the value of the 5% CD.
0.03(x) + 0.05(15,000 - x) = 650.00
Move decimal points two to the right:
3(x) + 5(15,000 -x) = 65,000
3x + 75,000 -5x = 65,000
3x -5x = -10,000
-2x = -10,000
x = 5,000 (a negative divided by a negative results
in a positive)
So George invested the following:
$5,000 (x) in the 3% CD
$10,000 (15,000-x) in the 5% CD