Question

Paul has $ 25000 to invest. His intent is to earn 11 % interest on his investment. He can invest part of his money at 6 % interest and part at 15 % interest. How much does Paul need to invest in each option to make get a total 11 % return on his $ 30000 ?

Answer 1

Answer: x=11 111.11 USD - investments at 6% interest

25000-11 111.11= 13 888.89 USD investments at 15 % interest

Explanation:

Paul wants to have 11% from 25000 USD that is 0.11*25000=2750 USD

Let Paul invests x USD at 6% interest (which makes him 0.06*x USD yearly) and the residual amount, i.e.

25000-x at 15% interest. (Which makes 0.15*(25000-x)= 3750-0.15*x ).

So the total return per year:

0.06*x+3750-0.15*x=2750

3750-0.09*x-2750=0

1000-0.09*x=0

x=1000/0.09

x=11 111.11 USD - investments at 6% interest

25000-11 111.11= 13 888.89 USD investments at 15 % interest