SOLUTION: You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest.(There is more risk in the 4 1/2% fund.) Your goal is to obtain a total annual interest income of $1000
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Question 394806: You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest.(There is more risk in the 4 1/2% fund.) Your goal is to obtain a total annual interest income of $1000 from the investments. What is the smallest you can invest in the 4 1/2% fund in order to meet your objective?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest.(There is more risk in the 4 1/2% fund.) Your goal is to obtain a total annual interest income of $1000 from the investments. What is the smallest you can invest in the 4 1/2% fund in order to meet your objective?
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Equations:
Quantity: x + y = 25000
Interest:0.03x + 0.045y = 1000
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Multiply thru 1st by 3
Multiply thru 2nd by 100
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3x + 3y = 3*25000
3x+4.5y = 100,000
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1.5y = 25000
y = 1666.67 (amt to invest at 4.5%
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Cheers,
Stan H.
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