Fernando invested money in a 3 year CD that returned the equivalent of 4.4% simple interest. He invested \$2000 less in an 18 month CD that had 3% return. If the total amount of interest from these investments was \$706.50, determine how much was invested in each CD.
Not sure how to do this.
Does 4.4% simple interest mean each year or at the end of 3 years?
Best Answer
It's likely that the interest rates are annual rates. Here are some hints.
Let the amount invested in the three-year CD be $x$. Then the interest earned over three years is $(3)(0.044)x$ ($3$ years, times $4.4\% = 0.044$ per year, times the amount invested).
This will allow you to solve for $x$ (the first amount), and then the second amount which is related to $x$.
More explicit hints: