document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1141789>Question 1141789</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Luis just retired, and has $900,000 to invest. A very safe Certificate of Deposit (CD) account pays 2%, while a riskier bond fund pays 4.5% in interest. Luis figures he needs $36,000 a year in interest to live on. How much should he invest in each account to make enough interest while minimizing his risk?\r<BR>\n" );
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document.write( "How much $ at 2%?\r<BR>\n" );
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document.write( "How much $ at 4.5% </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #762447 by </B><A HREF=/tutors/aboutme.mpl?userid=greenestamps><B>greenestamps(13200)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=greenestamps><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=greenestamps><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=762447\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <br><BR>\n" );
document.write( "Here is an alternative to the standard algebraic solution method shown by the other tutor.  If you understand this method, it will get you to the solution to any mixture problem like this much faster and with far less effort than the algebraic method.<br><BR>\n" );
document.write( "The method is based on the fact that the ratio in which the money must be split between the two investments is exactly determined by where the average interest rate lies between the two individual interest rates.<br><BR>\n" );
document.write( "$36,000 on an investment of $900,000 is an interest rate of 4%.<br><BR>\n" );
document.write( "Picture the three rates on a number line -- 2%, 4%, and 4.5%.  Simple arithmetic shows that the 4% is 4/5 of the way from 2% to 4.5%.  (4.5-2 = 2.5; 4-2 = 2; 2/2.5 = 4/5)<br><BR>\n" );
document.write( "That means 4/5 of the total investment must be at the higher rate.<br><BR>\n" );
document.write( "ANSWER: 4/5 of $900,000 = $720,000 at 4.5%, the rest, $180,000, at 2%.<br><BR>\n" );
document.write( "CHECK: <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=.045%28720000%29%2B.02%28180000%29+=+3240%2B360+=+3600 ALIGN=MIDDLE  ALT=\".045%28720000%29%2B.02%28180000%29+=+3240%2B360+=+3600\"   DISABLED_style= \"max-width:90%; height:auto;\" > </SPAN>\n" );
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