Answer
1500 dollars must be invested at 7%.
Work Step by Step
Let X represent the amount of money invested at 7%.
We receive 7% $\times$ X = 0.07X from this investment.
From the 3000 dollars invested at 4% we receive:
4% $\times$ 3000 = 120
The average return for both investments is 5%.
The total for both investments equals 3000 + X, so we can set up the following equation:
0.07X + 120 = .05 $\times$ (3000 + X)
0.07X + 120 = 150 + 0.05X
0.02X = 30
Divide both sides by 0.02:
X = 1500
1500 dollars must be invested at 7%.
