SOLUTION: A man has $95,000 invested in stocks at 9%. How much additional money should he invest in CD's paying 3% so that the average return on the two investments is 4%?

Question 288440: A man has $95,000 invested in stocks at 9%. How much additional money should he invest in CD's paying 3% so that the average return on the two investments is 4%?
Answer by mananth(16946) (Show Source): You can put this solution on YOUR website!
let him invest x in cd's
0.03x +0.09*95000 is the interest he will get

The total investment is x+95000. 4% of this amount must be equal to the interest he will get without investment in cd's
4% of ( x+95000)= 0.04 * (x+95000)
0.03x+0.09*95000 = 0.04 * ( x+95000)
0.03x + 8550 = 0.04x +3800
0.01x= 8550-3800
0.01x= 4750
x= 4750 / 0.01
x= 475000 He has to invest $475,000 on 3% cd's.
RELATED QUESTIONS
Ed Moura has $33000 invested in stocks paying 5%. How much additional money should he... (answered by mananth)

Ed Moura has $32000 invested in stocks paying 8%. How much additional money (answered by solver91311)

man has $93000 invested in stocks at 8%. How much additional money should he invest in... (answered by mananth)

Jerry and Lucy Keefe have $30,000 invested in stocks paying 5%. How much additional money (answered by josmiceli)

Mr. Tran has $24,000 to invest, some in bonds and the rest in stocks. He has decided that (answered by ikleyn)

Shaun and Rebecca have a new grandson. How much money should they invest now so that he... (answered by ankor@dixie-net.com)

Jerry and Lucy have $29,000 invested in stocks paying 5%. How much additional money... (answered by Earlsdon)

Betsy, a recent retiree, requires $6000 per year in extra income. She has $50,000 to... (answered by ikleyn,greenestamps,math_tutor2020)

A man has 3 times as much money invested in 12% bonds as he has in stocks paying 9%. If... (answered by stanbon)