Question

e lottery winner who is going to invest in utility bonds and a savings account using the following data: Assume that her total winnings are $ 700000, that the utility bonds will pay 3 percent per year, and that the savings account will pay 2 percent per year. How much should she allocate to each investme?

Answer 1

How much should she allocate to each investme?

420000 in Bonds and

280000 in Saving Account

Step-by-step explanation:

x*0.03 = y*0.02

Assuming she has to invest everything

x+y = 700,000

x = 700,000-y

Plug that in to the above

(700000-y)*0.03 = y*0.02

21000 - 0.03y = 0.02y

21000 = 0.05y

y = 420000

x = 700,000-y

x = 700,000-420000= 280000

420000 in Bonds and

280000 in Saving Account

Income saving=280000*2%=5600

Utility bonds=420000*3%= 12600