Part 1: You decide to invest some money in two different money market accounts.

Question

Part 1:

You decide to invest some money in two different money market accounts. One account (account A) pays 3% interest. The other account (account B) pays only 2% interest but offers a $30 bonus for signing up for the account paid at the end of the three year period. Write an expression for each account to determine the amount of interest (and bonus) you would earn after three years. Use y to represent interest (and bonus) and x to represent the principle invested. Label each equation.

Part 2:

Solve the system of equations you developed in the above algebraically (using either substitution or elimination) to determine what amount of money/principle x must be invested to have the same amount in each account at the end of the given period. Then, find the interest (plus bonus if applicable) that the accounts would have in addition to principle at the end of the period. Be sure to state which method you are using, show all work, then give the meaning of your solution in the context of the problem. Remember that a system of equations has an ordered pair as a solution, so you should be telling me what each value means (x, y).

Explanation / Answer

1st account pays 3% interest

so expression can be written as

y = .03x

2nd account pays 2% interest + $ 30 bonus

so expression can be written as

y = .02x + 30

b) solving the equations

.02 x + 30 = .03x

30 = .03 x - .02 x

x = 3000

principal = $ 3000

and interest = $ 90

substitution method is used to solve the equations

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