Problema Solution
Vincent and ricarda have invested $27,000 in bonds paying 7%. how much additional money should they invest in a certificate of deposit paying 4% simple interest so the total return on the two investments will be 6%.
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let 'x' be the additional money invested in a certificate of deposit paying 4% simple interest
Vincent and Ricarda have invested $27,000 in bonds paying 7% - for this investment they will earn simple interest of 0.07*27000
from the additional x they will earn interest: 0.04*x
the total return on the two investments (27,000 + x) will be 6% that is interest of 0.06(27000 + x)
0.07*27000 + 0.04x = 0.06(27000 + x)
by solving we find
x = $13,500
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they should invest $13,500 additional money.