The amount invested is the principal, P
P = $3500
Rate, R = 5%
Time, T = 1 year
The formula for Simple Interest is given as:
[tex]I\text{ = }\frac{PRT}{100}[/tex][tex]\begin{gathered} I\text{ = }\frac{3500\times5\times1}{100} \\ I\text{ = }175 \end{gathered}[/tex]The 5% Interest on $3500 = $175
The total interest = $553
Interest at 7% rate = $553 - $175
Interest at 7% rate = $378
The amount that will be invested at 7% interest rate will then be calculated using the formula
[tex]\begin{gathered} I\text{ = }\frac{PRT}{100} \\ 378\text{ = }\frac{P\times7\times1}{100} \\ 378(100)\text{ = 7P} \\ 37800\text{ = 7P} \\ P\text{ = }\frac{37800}{7} \\ P\text{ = }5400 \end{gathered}[/tex]You will need to invest $5400 at 7% simple interest
