SOLUTION: vincent and ricarda have invested $27,000 in bonds paying 5%. how much additional money should they invest in a certificate of deposit paying 2% simple interest so that the total a

Algebra.Com
Question 904304: vincent and ricarda have invested $27,000 in bonds paying 5%. how much additional money should they invest in a certificate of deposit paying 2% simple interest so that the total annual return on the two investments will be 4%.
Answer by richwmiller(17219)   (Show Source): You can put this solution on YOUR website!
.04(27000)=1080
We know the total amount of money invested. $27000
x+y=27000,
We know that the total interest for the year for the two accounts is $1080
0.05*x+0.02*y=1080
x=27000-y
We substitute for x
0.05*(27000-y)+0.02*y=1080
We multiply out
1350-0.05y+0.02*y=1080
We combine like terms.
-0.03*y=-270
Isolate y
y=9000 at 2%
x=27000-y
Calculate x
x=18000 at 5%
We check
0.05*18000+0.02*9000=1080
900+180=1080
1080=1080
Since this statement is TRUE and neither amount is negative then it is ok

RELATED QUESTIONS

Betsy, a recent​ retiree, requires ​$6,000 per year in extra income. She has... (answered by ikleyn)
Jerry and Lucy Keefe have $30,000 invested in stocks paying 5%. How much additional money (answered by josmiceli)
​Betsy, a recent​ retiree, requires ​$6,000 per year in extra income. She has... (answered by Theo,greenestamps,math_tutor2020)
Betsy, a recent retiree,requires $6000 per year in extra income.She has $50,000 to invest (answered by ikleyn,greenestamps)
Betsy, a recent retiree, requires $6000 per year in extra income. She has $50,000 to... (answered by ikleyn,greenestamps,math_tutor2020)
Steve, a recent retiree, requires $5000 per year in extra income. He has $70,000 to... (answered by ikleyn)
A $136, 000 trust is to be invested in bonds paying 8%, CDs paying 7%, and mortgages... (answered by stanbon)
John received an inheritance of $12,000$12,000 that he divided into three parts and... (answered by Boreal)
Jane has $10 000 to invest. She invested part of it in a term deposit that pays 4% per... (answered by checkley71)