Question

A total of 31,000 is to be invested, some in bonds and some in certificates of deposit (CDs). If the amount invested in bonds is to exceed that in CDs by 1,000 how much will be invested in each type of investment?

Answer 1

Bonds: $42,000

Certificates of deposit: $41,000

Explanation:

Total invested = Amount in bonds + Amount in CDs

Amount in bonds = Amount in CDs + 1000

Let the amount in bonds = B and the amount in CDs = C

1. 83,000 = B + C

2. B = C+1000

Since the above expression (#2) defines B, you can substitute it for the B in the first equation (#1).

83,000 = C + 1000 + C

Now, you can solve for C.

83,000 = 2C + 1000

82,000 = 2C

41,000 = C

You know that the amount invested in bonds is $1000 greater than the amount invested in CDs, so add $1000 to C and you find B, $42,000.