Problema Solution
Betsy requires %6,000 per year in extra income. She has $70,000 to invest and can invest in bonds paying 15% per year or in a certificate of deposit paying 5% per year. How much money should be invested in each to realize exactly $6,000 in interest per year?
Answer provided by our tutors
Let
x = the money that Betsy invests in bonds paying 15% per year that is 0.15*x per year
y = the money that Betsy invests in a certificate of deposit paying 5% per year that is 0.05*y per year
The total money invested is x + y = 70000
The total interest per year is = interest from bonds per year + interest from certificate of deposit per year
6000 = 1.15*x + 0.05*y
By solving the system of equations
x + y = 70000
6000 = 1.15*x + 0.05*y
we find
x = $22,727.3
y = $67,727.3
Betsy needs to invest $22,727.3 in bonds and $67,727.3 in a certificate deposit.