If Ben invests $3500 at 4% interest per year, how much additional money must he invest at 5 1 2 % annual interest to ensure that the interest he receives each year is 4 1 2 % of the total amount invested?

Question

Business

Allison Horne

13 March, 15:28

If Ben invests $3500 at 4% interest per year, how much additional money must he invest at 5 1 2 % annual interest to ensure that the interest he receives each year is 4 1 2 % of the total amount invested?

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Answers (1)

Know the Answer?

Ansley Fowler · Answer 1

Ben must invest $1,750 as additional amount.

Explanation:

Let

"A" is the additional amount to be invested

According to given condition

Investment on 3.5% + additional Investment at 5.5% = Investment at 4.5%

($3,500 x 4%) + (A x 5.5%) = ($3500 x 4.5%) + (A x 4.5%)

$140 + 0.055A = $157.5 + 0.045A

0.055A - 0.045A = $157.5 - $140

0.01A = $17.5

A = $17.5 / 0.01

A = $1750

Check

140 + (1750 x 5.5%) = 157.5 + (1750x4.5%)

$236.25 = $236.25