Question

Avery and Caden have saved $27,000 towards a down payment on a house. They want to keep some of the money in a bank account that pays 2.4% annual interest and the rest in a stock fund that pays 7.2% annual interest. How much should they put into each account so that they earn 6% interest per year?

Answer 1

$6750 in the bank account and $20,250 in the stock fund

Explanation:

If B is the money they put in the bank and S is the amount they put in the stock fund, then:

B + S = 27000

1.024 B + 1.072 S = 1.06 × 27000

Solving the system of equations:

1.024 (27000 − S) + 1.072 S = 28620

27648 − 1.024 S + 1.072 S = 28620

0.048 S = 972

S = 20250

B = 27000 − S

B = 6750

They should put $6750 in the bank account and $20,250 in the stock fund.