HANDOUT 3.4.

5
Solving Word Problems Involving Linear Equations in One Variable:
Investment and Money Problems

INVESTMENT/BUSINESS PROBLEMS

Investment problem deals about percentage, discounts, interests, commissions and a like.

The money deposited or borrowed is called the principal (𝑃), the money paid for its use is called interest (𝐼),
and how much is to be paid per Php 100 is called the rate of the interest (𝑅). The length of time involved is
denoted by 𝑡, with 𝑡 usually given in years. To solve this kind of problem, use the formula: 𝐼 = 𝑃𝑅𝑇

We usually buy items during a sale because there is a reduction in price which is called discount. The
discount is given as a percent of the marked price. The price paid after the discount has been removed is
called the sale or net price. We use the relationship 𝐷 = 𝑀𝑃 × 𝑅 when solving for a discount.

An agent who sells or buys goods for another receives a sum of money which is usually a certain percent of the
value of the goods. The money received by the agent is called commission and the amount turned to the owner
of the goods after the commission has been deducted is called net proceeds. In solving for a commission,
multiply the amount of sale by the rate of commission.

1. Example: A bank charges 18% interest per annum on a loan. If Mr. Mendoza made a loan of Php
7000.00, how much interest does he have to pay after a year?

Solution:
From the problem, we can get the given:
𝑅 = 18%
𝑃 = 𝑃ℎ𝑝 7000
𝑇 = 1 𝑦𝑒𝑎𝑟

Using the formula, 𝐼 = 𝑃𝑅𝑇

𝐼 = 7000 × 18% × 1
𝐼 = 7000 × 0.18
𝐼 = 1260
The interest to pay after a year is Php 1260.

2. Example: Mr. Reynoso gave Php 30 000 to his wife and son. The wife invested her money at 8% and the
son invested his at 12%. The two investments yield equal annual incomes. How much was given to the
wife and how much to the son?

Solution:
Let 𝑥 = amount invested at 12% (amount given to his son)
Let 30 000 − 𝑥 = amount invested at 8% (amount given to his wife)

Since the two investments yield equal annual incomes, we have our working equation as,
0.12𝑥 = 0.08(30 000 − 𝑥)
Solving the equation by first multiplying the equation by 100,
12𝑥 = 8(30 000 − 𝑥)
12𝑥 = 240 000 − 8𝑥
12𝑥 + 8𝑥 = 240 000
20𝑥 = 240 000
𝑥 = 12 000

Php 12 000 is the amount given to his son and 𝑃ℎ𝑝 30 000 − 𝑃ℎ𝑝 12 000 = 𝑃ℎ𝑝 18 000 the amount given to
his wife.
3. Example: Anthony invested a certain amount of money at 5 percent per year and an amount twice as
large at 6 percent per year. The total annual income from the two investments was Php 4250. Find the
amount invested at each rate.

Solution:
Let 𝑥 = the amount invested at 5%
Let 2𝑥 = the amount invested at 6%

Since the total annual income from the two investments is Php 4250, we have the working equation:
0.05𝑥 + 0.06(2𝑥) = 4250
Solving the working equation by first multiplying 100,
5𝑥 + 6(2𝑥) = 425000
17𝑥 = 425000
𝑥 = 25000

Php 25 000 is invested at 5% while 2(25 000) = Php 50 000 is invested at 6%

4. Example: For their anniversary sale, a store gave 20% off on all items. How much will Marife pay for a
pair of shoes originally priced at Php 1199.75

Solution:
From the problem, we have the following given:
𝑅 = 20%
Original price = Php 1199.75

Using the formula 𝐷 = 𝑀𝑃 × 𝑅, we first get the discount:

𝐷 = 1199.75 × 0.20
𝐷 = 239.95
Since we are looking for the sale price, we subtract Php 239.95 from the original price. Thus,
1199.75 − 239.95 = 959.80

Answer to the problem: The sale price is Php 959.80

5. Example: For every appliance that a saleslady sells, she gets an 18% commission. How much
commission will she get if she sells Php 12 000 worth of appliances?

Solution:
From the problem, we have the following given:
𝑅 = 18%
Gross Sales = Php 12 000

Using the formula, commission = rate of commission × gross sales, we have our equation
Commission = 0.18 × 12000 = 2160

She will get a commission of Php 2160.00

EXERCISES:

1) The profits of a business are shared among three stockholders. The first stockholder
receives twice as much as the second, and the second receives three times as much as the
third. If the profits for last year were P264,000, how much did each stockholder receive?
 2) Abi invested some money at 3% and $4,000 less than that amount at 5%. The two
investments produced a total of $200 interest in a year. How much were invested at each
rate?

3) With income earned by selling the rights to her life story, Regine invests some of the
money at 3% and $30,000 more than twice as much at 4%. The total annual interest
earned from the two investments is $5,600. How much is invested at each rate?

4) A man has P1,000,000 invested at 7.4%. How much can he invest at 5% in order to make
6.6 percent on his total investment?

5) Jane has P180,000 invested and gets an income of P14700. Part of the investment pays
10%, and the remainder pays 7%. How much is invested at each rate?

6) A woman invested P250,000 in two business ventures. Last year she made a profit of
15% from the first venture but lost 5% from the second venture. If last year’s income
from the two investments was equivalent to a return of 8% on the entire amount
invested, how much has she invested in each venture?

7) An investor wishes to realize a return of 12% on a total of two investments. If he has

P100,000 invested at 10%, how much additional money should be invested at 16%?

8) A retail merchant invested P6.5 million in three kinds of cameras. The profit on the sales
of Camera A was 25%; on the sales of camera B, the profit was 12%; and there was a loss
of 1% on the sales of camera C. If the merchant invested an equal amount in cameras A
and B, and the overall profit on the total investment was 14%, how much was invested in
each kind of camera?

9) Maria invested a portion of P31,750 at 9% and the remainder at 10%. If the total income
from the money is P3020, how much did she invest at each rate?

10) Pedro has an income of P300,000 from the business he inherited. He pays a total income
tax of 28% and invests part of the amount left at 10% and the remainder at 12%. How
much was invested at each rate if the total income from these two investments is
P23,600?

MONEY/COIN PROBLEMS

When solving problems that involve money, we must keep in mind two ideas. One is the number of coins of a
given type, and the other is the value of those coins. Also, we may know certain facts about the total number
of all coins or their total value.

1. Example: A coin purse has 50 coins in one-peso and two-peso denominations. The value of all the coins
is 90 pesos. Find the number of coins each denomination in the purse.

Solution:
Let 𝑥 = the number of one – peso coins
Since there are a total of 50 coins, we let 50 − 𝑥 = the number of two – peso coins
 Since the total value of all the coins is 90 pesos, we have the working equation:

1(𝑥 ) + 2(50 − 𝑥 ) = 90
Solving the working equation,
𝑥 + 100 − 2𝑥 = 90
−𝑥 = −10
𝑥 = 10

There are 10 one – peso coins and 40 two – peso coins.

2. Example: The money of Zari and Nikki are in the ratio of 5:3. If Zari will give Nikki eight pesos, they
will have equal amounts. How much does each have?

Solution:
Let 5𝑥 = money of Zari
Let 3𝑥 = money of Nikki

If Zari gives Nikki eight pesos, they will have equal amounts. From this we will have our working
equation as,
5𝑥 − 8 = 3𝑥 + 8
Solving the equation,
5𝑥 − 3𝑥 = 8 + 8
2𝑥 = 16
𝑥=8

Thus, 5𝑥 = 5(8) = 40 pesos is Zari’s money and 3𝑥 = 3(8) = 24 pesos is Nikki’s money.

3. Example: There are 51 bills in a cash box which totals to 1,830 pesos. These bills are either 20 or 50
pesos. How many of each denomination of bill are in the box?

Solution:
Let 𝑥 = the number of 20 – peso bill
Let 51 − 𝑥 = the number of 50 – peso bill

Bills Number Value

20 pesos 𝑥 20𝑥
50 pesos 51 − 𝑥 50(51 − 𝑥)

Since the total amount of the bills is 1,830 pesos, we will have the working equation:
20𝑥 + 50(51 − 𝑥 ) = 1830
Solving the working equation,
20𝑥 + 2550 − 50𝑥 = 1830
−30𝑥 = −720
𝑥 = 24

Thus, there are 24 twenty – peso bills and 27 fifty – peso bills.

EXERCISES:
1) Admission tickets to a Pisay: the Movie special screening were priced at P100
for adults and P60 for students. If 410 tickets were sold and the total receipts
amounted to P35,800, how many adults attended?
2) A bank teller has some P50 bills and some P200 bills. The teller has five more
P200 bills than P50 bills. The total value of the money is P7,250. Find the
number of P50 bills.

3) A coin collector has $1.70 in dimes and nickels. She has two more dimes than
nickels. How many nickels does she have?

4) A cashier has a total of 126 bills, made up of fifties and hundreds. The total
value of the money is P8,400. How many of each kind does she have?

5) The petty cash drawer of a small office contained P16.25. If there were twice as
many 5-centavo coins as 25-centavo coins and as many 10-centavo coins as 5-
centavo and 25-centavo coins combined, how many coins of each type were
there?

6) In the cafeteria, hamburgers cost P30 each and a bag of fries P25 each. How
many hamburgers and how many bags of French fries can a customer buy with
P340 if he wants twice as many hamburgers as bags of French fries?

7) Keith paid P2143 for a collection of seven CDs. Some were on sale for P394,
and some for P189. How many of each type did he buy?

8) There were 11,000 people in attendance at a recent basketball game who paid a
total of P790,000 in entrance fees. Students paid P30 each, and non-students
paid P80 each. How many students attended?

9) How many kilograms of chocolate costing P46 per kg may be mixed with 6 kg
of chocolate costing P50 per kg to produce a mixture that can be sold for P49
per kg?

10) How many packs of candy worth P50 per pack must be mixed with 60 packs
that are worth P40 per pack to get a special Christmas mixture to sell for P44
per pack?