Question

Cyndee wants to invest $50,000. Her financial planner advices her to invest in three types of accounts: one paying 4%, one paying 5.5%, and one paying 6% simple interest per year. Cyndee wants to put twice as much in the lowest yielding, least-risky account as in the highest-yielding account. How much should she invest in each to achieve a total annual return of $2400?

Answer 1

Answer: $15,000

Explanation:

Let x be the amount invested in the highest-yielding account. Then, Cyndee invested 2x in the lowest-yielding account and 50000 - 3x in the account yielding 5.5%.

The annual interest earned on each account is:

- 0.06(50000 - 3x) for the account yielding 6%

- 0.055(50000 - 3x) for the account yielding 5.5%

- 0.04x for the account yielding the highest interest rate.

The sum of these interests should equal $2400:

0.06(50000 - 3x) + 0.055(50000 - 3x) + 0.04x = 2400

Simplifying this equation, we get:

0.03x = 450

x = 15000

Therefore, Cyndee should invest $15,000 in the account yielding the highest interest rate, $30,000 in the account yielding 4% interest rate, and $5,000 in the account yielding 5.5% interest rate.