Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received ...

Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received $650 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received $725 as interest. What was the value of his total savings before investing in these two bonds?

Quiz

Answer/Solution

3,250

Steps/Work

So, we know that Shawn received 20% of the amount he invested in a year. We also know that in one year Shawn received $325, thus 0.2x = $325 --> x = $1625
Since, he invested equal sums in his 2 bonds, then his total savings before investing was 2*$1,625 = $3,250
Answer D

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Shawn invested one half of his savings in a bond that paid simple interest for years and received $ as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same years at the same rate of interest and received $ as interest. What was the value of his total savings before investing in these two bonds?

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