Question

After inheriting some money, a woman wants to invest enough to have an annual income of $5,000. If she can invest $20,000 at 9% annual interest, how much more will she have to invest at 7% to achieve her goal? (See the table. Round your answer to the nearest cent.)

Answer 1

I hope that the answer I give you is correct. Doing my best to help.

Explanation:

Assuming this is simple interest (non-compounding), if the woman invests $20000 at 9%/year, she will earn

i = prt

i=20000 * .09 * 1

i=1800

so for the woman to supplement that $1800 to $5000, she will need to get a return of $3200 in her second investment invest at 7%/year.

i = prt

3200 = p * .07 * 1

3200/.07 = p

45714.28 = p

I hope this is correct, or at least sends you on the way to the correct answer.