Question

Ed Moura has $32000 invested in stocks paying 6% .how much additional money should he invest in certificates of deposit paying 3% so that the average return on the two investments is 4%

Answer 1

Ed Moura invest $64000 in certificates of deposit paying 3%

Explanation:

Ed Moura has $32000 invested in stocks paying 6%.

Additional money in certificates of deposit paying 3% =x

so that the average return on the two investments is 4%.

32000*6% +3%*x = 4%(32000+x)

32000*0.06 +0.03*x = 0.04(32000+ x)

1920 + 0.03x = 1280 +0 .04x

1920 - 1280 = 0.04x - 0.03x

0.01x = 640

x = 64000

x = $64000

x= $64000 in certificates of deposit paying 3%

Thank you.