Split Fund Interest with Principal of 20000 and Fund 1 = 10% and Fund ·

21 Apr 2024, 00:00

Split Fund Interest with Principal of 20000 and Fund 1 = 10% and Fund Image to Crop

An investment of 20000 was made one year ago.

Part of the investment was placed into an account paying s interest at 10%

The remainder of the investment was placed into an account paying s interest at 7%

After one year, you received a total of 1880 in interest. How much was invested in each account?

Calculate Principal Amounts for each fund:

For Fund 1, we invest an unknown amount, let us call it x

For Fund 2, the remaining principal is 20000 - x

Calculate Interest Credit for Fund 1

Since Fund 1 credits interest using the simple interest method, we have 0.1x

Calculate Interest Credit for Fund 2

Since Fund 2 credits interest using the simple interest method, we have 0.07(20000 - x)

Set up a grid with fund details:

	Interest Paid	Principal	Interest Rate
Fund 1	0.1x	x	10%
Fund 2	0.07(20000 - x)	(20000 - x)	7%
Total	1880	20000	--

Calculate x from the grid:

Since both Interest paid columns add up to the total interest earned of 1880, we set up an equation

0.1x + 0.07(20000 - x) = 1880

0.1x + 1400 - 0.07x = 1880

1400 + 0.03x = 1880

Subtract 1400 from each side:

1400 - 1400 + 0.03x = 1880 - 1400

Cancelling the 1400 on the left side, we get:

0.03x = 480

Divide each side by 0.03

Cancelling the 0.03 on the left side, we get:

x = 16000 ← Fund 1 Investment

This means we should 20000 - 16000 = 4000 into Fund 2

Final Answer

16000 into Fund 1
4000 into Fund 2

You have 1 free calculations remaining

What is the Answer?

16000 into Fund 1
4000 into Fund 2

How does the Split Fund Interest Calculator work?

Free Split Fund Interest Calculator - Given an initial principal amount, interest rate on Fund 1, interest rate on Fund 2, and a total interest paid, calculates the amount invested in each fund.
This calculator has 4 inputs.

What 3 formulas are used for the Split Fund Interest Calculator?

Fund 1 investment is x
Fund 2 investment is T - x
Interest paid = Interest Rate * Investment

For more math formulas, check out our Formula Dossier

What 3 concepts are covered in the Split Fund Interest Calculator?

interestpayment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rateprincipalThe amount borrowed on a loan, before interest is chargedsplit fund interest

Split Fund Interest with Principal of 20000 and Fund 1 = 10% and Fund

An investment of 20000 was made one year ago. Part of the investment was placed into an account paying s interest at 10% The remainder of the investment was placed into an account paying s interest at 7%