Simple Interest

The formula necessary to solve simple interest problems is

I = PRT

equation

Example 1

Jim has $10,000 to invest. He will invest part at 9% annual interest and the remaining part at 12% annual interest. After one year, he expects to earn $165 more from the 9% investment than from the 12% investment. How much will he invest at each rate?

Let x = amount invested at 9%. Then equation

The sentence “he expects to earn $165 more from the 9% investment than from the 12% investment” is translated into the following.

equation

The check is left to you. Jim will invest $6500 at 9% and $3500 at 12%.