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Betsy a recent retiree, requires $6,000 per year in extra income. She has $60,000 to invest and can invest in B-rated bonds paying 15% per year or in a certificate of


deposit (CD) paying 5% per year. How much money should be invested in each to realize exactly $6,000 in interest per year?

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The amount of money invested at 15% =

The amount of money invested at 5% =

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Answer 1

The amount of money invested at 15% = 30,000

The amount of money invested at 5% = 30,000

Explanation:

Calculation for How much money should be invested

Let x dollars = 15%,

Let y dollars= 5%,

x + y = 60,000

0.15x + 0.05y = 6,000

Multiply the 1st Equation by -0.15:

-0.15x - 0.15y = -9,000

0.15x + 0.05y = 6,000

Add the 2 Equations :

-0.1y = -3,000

y=3,000/0.1

y = 30,000

Substitute 30,000 for y in the 1st Equation

x + 30,000 = 60,000

x = 60,000 - 30,000

x= 30,000

PROOF:

.15*30,000+.05*30,000=6,000

4,500+1,500=6,000

6,000=6,000

Hence,

The amount of money invested at 15% = 30,000

The amount of money invested at 5% = 30,000