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Can someone PLEASE help me with this math problem? Or at least explain it?
Betsy, a recent retiree, requieres $6,000 per year in extra income. She has $60,000 to invest and can invest in B-rated bonds paying 13% per year or in a certificate of deposit (CD) paying 5%per year. How much money should be invest in each to realize exactly $6000 in interest per year?
I have several questions on my math homework with this same format, so if someone could explain to me how to do this one, I'll have something to go by for the rest. Thanks in advance.
3 Answers
- DifferentialLv 66 years ago
1. B + CD = 60,000 --> CD = 60,000 - B
2. 0.13B + 0.05CD = 6,000
Substitute equation 1 into equation 2:
0.13B + 3,000 - 0.05B = 6,000 --> 0.08B = 3,000 --> B = 37,500
Invest $37,500 in Bonds and $22,500 in CDs.
- sepiaLv 76 years ago
0.13x + 0.05(60,000 - x) = 6,000
0.08x = 6,000 - 3,000
x
= 3,000/0.08
= 300,000/8
= 37,500
She has to invest $37,500 in B-rated bonds and $22,500 in the CD.
