Question

An investor has $240,000 to invest, part at 9% and the remainder in a less risky investment

at 4%. If her investment goal is to have an annual income of $19,000, how much should
she put into each investment?

Answer 1

Investment A = 188,000

Investment B = $52,000

Explanation:

Given the following :

Total. Amount to invest = $240,000

Investment A:

Principal = a

Rate = 9% = 0.09

Investment B:

Principal = (240,000 - a)

Rate = 4% = 0.04

Principal * rate * time

Principal A * rate A + Principal B* rate B = 19000

a * 0.09 + (240,000 - a) * 0.04 = 19000

0.09a + 9600 - 0.04a= 19000

0.05a = 19000 - 9600

0.05a = 9400

a = 9400 / 0.05

a = 188,000

Investment A = 188,000

Investment B = (240,000 - 188,000) = $52,000