Question

Jane has $10000 to invest in AAA and AA bonds. The AAA bond yields a 5% and requieres a minimum investment of $1000. The AA bond yields an average of 8% and requires a minimum investment of $2000. Jane requires that at least three times as much money should be invested in the AAA bond as in the AA bond

Answer 1

Given:
$10,000 to invest
AAA bonds - minimum of $1,000 yields 5%
AA bonds - minimum of $2,000 yields 8%

Jane requires that at least three times as much money should be invested in the AAA bond as in the AA bond

Let x represent the investment in AA bond.

x + 3x = 10,000
4x = 10,000
x = 10,000 / 4
x = 2,500

Jane should invest 2,500 to AA bond.
Jane should invest 7,500 to AAA bond. This amount is 3 times the amount invested in AA bond.

2,500 * 8% = 200
2,500 + 200 = 2,700

7,500 * 5% = 375
7,500 + 375 = 7,875

Jane's $10,000 investment will earn $575 interest for a total of $10,575.