An Executive Invests $35,000, Some at 6% and Some at 7

question 63

Multiple Choice

An executive invests $35,000, some at 6% and some at 7% annual interest.If he receives an annual return of $2,150, how much is invested at each rate?

• A) \(\quad \$ 30,000\) at \(7 \% , \$ 5,000\) at \(6 \%\)
• B) \(\$ 31,100\) at \(6 \% , \$ 3,900\) at \(7 \%\)
• C) \(\quad \$ 30,000\) at \(6 \% , \$ 5,000\) at \(7 \%\)
• D) \(\quad \$ 30,500\) at \(6 \% , \$ 4,500\) at \(7 \%\)
• E) \(\quad \$ 31,000\) at \(6 \% , \$ 4,000\) at \(7 \%\)

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Definitions:

Net Income

The company's final financial gain once every expense, tax, and cost is subtracted from the gross income.

Operating Activities

Financial transactions and events related to the core business operations of a company.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.

Statement of Cash Flows

A financial document that provides detailed information about the cash inflows and outflows for a business over a specific period of time.