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15 January, 09:05

5000 is invested at 3% interest. How much money must be invested at 5% so that the total interest from the two investments is $275 after one year

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  1. 15 January, 12:52
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    2,500 dollars

    Step-by-step explanation:

    They invest 5000 dollars at 3% interest for one year.

    The formula for Simple Interest is S. I. = P*R*T

    Where S. I. stands for Simple Interest, P stands for principal amount invested, R stands for Rate of interest (in decimals), T stands for Time (in years).

    So Simple interest will be S. I. = 5000 x (3/100) x 1 = 150 dollars.

    Similarly they want to invest some amount say M at 5% interest for one year, then simple interest would be S. I. = M x (5/100) x 1 = 0.05M dollars.

    They want total interest from two investments to be 275 dollars.

    So, 150 + 0.05M = 275

    0.05M = 275 - 150 = 125

    M = 125/0.05 = 12500/5 = 2,500 dollars.

    Hence, they invest 2,500 dollars at 5% interest.
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