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Stacey has $20,000 to invest, split between an account paying 3% and one paying 5%, and wants a blended rate of 4.5%. How much should she invest at 3%?
A$15,000
B$10,000
C$20,000
D$5,000
Answer & Solution
Correct answer: D. $5,000
1. Let x equal the amount invested at 3%, so 20,000 minus x is invested at 5%.
2. The interest equation is 0.03x plus 0.05(20,000 minus x) equals 0.045 times 20,000, or 900.
3. Distribute and combine like terms: negative 0.02x plus 1,000 equals 900.
4. Subtract 1,000 and divide by negative 0.02 to get x equals 5,000.
5. Stacey should invest $5,000 at 3% and the remaining $15,000 at 5%.
_Source: OpenStax Elementary Algebra (CC BY 4.0), Ch 3 "Math Models", section 3.3 Solve Mixture Applications_
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