Question

A total of $30,000 is invested in two corporate bonds that pay 5.5% and 6.25% simple interest. the investor wants an annual interest income of %1800 from the investments. what is the most that can be invested in the 5,5% bond?

Answer 1

$10,000

Explanation:

Let x represent the amount invested in the 5.5% bond.

For an annual income of $1800, we want ...

(5.5%)x + (6.25%)(30,000-x) = 1800

(-0.75%)x + 1875 = 1800

-0.0075x = -75 . . . . . . . . . subtract 1875

x = 10,000 . . . . . . . . . . . . . divide by -0.0075

At most $10,000 should be invested at 5.5% to obtain at least $1800 in interest.