Question

if $4000 is invested at 8% per year, how much additional money needs to be invested at 12% per year so that the total annual interest income from the investments is $968?

Answer 1

An additional $5400 needs to be invested at 12% to reach a total annual interest income of $968 when $4000 is already invested at 8%.

Step-by-step explanation:

To find out how much additional money needs to be invested at 12% per year to achieve a total annual interest income of $968 when $4000 is already invested at 8% per year, we can set up a simple interest equation. The interest from the initial $4000 investment at 8% is $4000 × 0.08 = $320. To achieve the total desired interest of $968, the interest from the new investment at 12% must be $968 - $320 = $648.

Let the additional amount to be invested at 12% be x. The equation for the additional interest is x × 0.12 = $648. To find x, we divide both sides by 0.12: x = $648 / 0.12, which gives us x = $5400.

Therefore, an additional $5400 needs to be invested at 12% to achieve a total annual interest income of $968 alongside the initial investment of $4000 at 8%.