Question

One safe investment pays 10% per year, and a more risky investment pays 18% per year. A woman who has $139,700 to invest would like to have an income of $18,930 per year from her investments. How much should she invest at each rate?

Answer 1

$77,700 at 10%, $62,000 at 18% Let's assign the variable s for the amount of money that will be put into the safe investment. That means that 139700-s will the amount invested in the risky investment. So we can create the equation 0.10s + 0.18(139700 - s) = 18930 Now solve for s 0.10s + 0.18(139700 - s) = 18930 0.10s + 25146 - 0.18s = 18930 6216 - 0.08s = 0 6216 = 0.08s 77700 = s So she should invest $77,700 in the safe investment at 10% and ($139,700 - $77,700) = $62,000 in the risky investment at 18%