Question

A retired woman has $80,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% annual interest. The rest of it she wants to put in a CD that pays 7%.

If we let x be the amount the woman invests in the 15% bond, how much in dollars will she be able to invest in the CD?

Answer 1

the woman will have to invest 40000 at .15 to earn 6000 a year in interest. that leaves her 40000 to invest in a cd.

I set this up...

6000/x=15/100
cross multiply giving you 600000=15x
divide 600000 by 15 for x.
40000

40000 from 80000 leaves 40000 for investing

Answer 2

The amount of dollars she will be able to invest in her CD is $75,000

What is an investment?

An investment is defined as using of money to make a profit from anything like purchasing any product at a lower cost and selling it at a higher cost similarly to using money in the deposits to earn interest as a profit.

Let x be the amount the woman invests in the 15% bond, then the amount she invested in her CD is given by $80000- x.

The interest she receives from the 15% bond is given by 0.15x while the interest she receives from the 7% CD is given by

0.07  ( 8 0000 - x  )   =   5600- 0.07x

Given that her total annual interest is $6,000, then

0.15x   +  5600  -  0.07x   =  6000

0.08x   =   6000  -  5600

x   =   5000

Therefore, the amount of dollars she will be able to invest in her CD is $80000- $5,000 = $75,000

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