Problema Solution
Don James wants to invest $65,000 to earn $1143 per year. He can invest in B-rated bondspaying 2.1% per year or in a Certrificate of Deposit(CD) paying 1.5% per year. How much money should be invested in each to realize exactly $1143 in interest per year?
Answer provided by our tutors
Let
x = the money invested in B-rated bonds paying 2.1% per year
y = the money invested in a Certrificate of Deposit(CD) paying 1.5% per year
Don James wants to invest $65,000 to earn $1143 per year:
x + y = 65000
0.021x + 0.015y = 1143
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x = $28,000
y = $37,000
Don James should invest $28,000 in B-rated bonds and $37,000 in a Certrificate of Deposit(CD).