Question

A college student has $60,000 to invest. She invests part of it in a money market account at 6% and the rest in stocks at 8%. If she earns $4250 in one year, how much did she initially invest in the money market account?

a) $25,000
b) $30,000
c) $35,000
d) $40,000

Answer 1

The college student initially invested $30,000 in the money market account.

Step-by-step explanation:

Let's assume the amount invested in the money market account is x. Since the total amount invested is $60,000, the amount invested in stocks would be $60,000 - x.

Now, we can calculate the interest earned from each investment. The interest earned from the money market account is 0.06x, and the interest earned from the stocks is 0.08($60,000 - x).

Given that the total interest earned after one year is $4250, we can set up the equation 0.06x + 0.08($60,000 - x) = $4250.

Solving this equation, we find that x = $30,000. Therefore, the college student initially invested $30,000 in the money market account.