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Setting up Interest Problems


Date: 9/7/96 at 15:26:39
From: John Osborn
Subject: Setting up Interest Problems

I start with $10,000 in principle. I investing part in savings at 12 
percent simple interest and the rest in a mutual fund at 15 percent 
annually.  At the end of one year the income from the two funds is 
$1,275. How much was invested in each fund?

I know the following:  $10,000 = Principle
		                $1,275 = Interest Earned
               12 & 15 percent = Rate
                   1yr (12 mo) = Time

How do I go about setting this problem up?


Date: 9/8/96 at 0:58:32
From: Doctor Mike
Subject: Re: Setting up Interest Problems

Hi John, 
  
Put  S  dollars into Savings and  F  dollars into the Fund.  
Since all of the principal is invested in one or the other 
place, you have S + F = 10000 .  The information about rates
and total earnings tells you  S*(0.12) + F*(0.15) = 1275 .  
  
  I hope this helps.  You can take it from here.  

-Doctor Mike,  The Math Forum
 Check out our web site!  http://mathforum.org/dr.math/   
    
Associated Topics:
High School Interest

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