Question

Brian has 40000 to invest in a mix of corporate and municipal bonds. The corporate bond pays 10% simple annual interest and the municipal bonds pays 6% simple annual interest. If he expects to receive 3600 in interest payments this year, how much has Brian invested in the corporate bond?

Answer 1

Sum of money invested in corporate bonds = 30,000

Explanation:

Total sum = 40,000

The rate of interest for corporate bonds = 10 % = 0.1

The rate of interest for municipal bonds = 6 % = 0.06

Total interest = 3600

Let sum of money invested in corporate bonds = x

The sum of money invested in municipal bonds = 40000 - x

`x` × 0.1 × 1 + (
`40000 - x`) × 0.06 × 1 = 3600

(0.1- 0.06)
`x` + 2400 = 3600

0.04
`x` = 1200

`x` = 30,000

Since x = sum of money invested in corporate bonds

So sum of money invested in corporate bonds = 30000