SOLUTION: Betsy, a recent retiree, requires $5,000 per year in extra income. She has $50,000 to invest and can invest in B-rated bonds paying 13% per year or in a certificate of deposit (CD)

Question 957652: Betsy, a recent retiree, requires $5,000 per year in extra income. She has $50,000 to invest and can invest in B-rated bonds paying 13% per year or in a certificate of deposit (CD) paying 3% per year. How much money should be invested in each to realize exactly $5,000 in interest per year?
The amount of money invested at 13% =$ ???
The amount of money invested at 3% =$ ???
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!

Money_Word_Problems/957652 (2015-03-22 14:20:40): Betsy, a recent retiree, requires $5,000 per year in extra income. She has $50,000 to invest and can invest in B-rated bonds paying 13% per year or in a certificate of deposit (CD) paying 3% per year. How much money should be invested in each to realize exactly $5,000 in interest per year?
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Quantity:: B + C = 50,000
Interest:: 0.13B + 0.03C = 5000
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Modify for elimination:
13B + 13C = 13*50,000
13B + 3 C = 100*5000
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Subtract and solve for "C":
10C = 3*50,000
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C = 3*5000
C = $15,000 (amt. invested at 3%)
B = $35,000 (amt. invested at 13%)
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Cheers,
Stan H.
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The amount of money invested at 13% =$ ???
The amount of money invested at 3% =$ ???
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