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Question 1149802: Please help me solve. Mike has $235,000 he wishes to invest in two rental properties. One yields 10% and the other yields 12%. For safety he wants to split his investment between the two properties instead of investing all of his money in the higher yielding rental property. If his goal is to achieve a total income earned of $25,000 a year from these two properties, how much money should he invest in each property.
Answer by ikleyn(52747)   (Show Source):
You can put this solution on YOUR website! .
Let x (dollars) be the amount invested at 12%.
Then the amount invested at 10% is (235000-x) dollars.
The 12% investment produce the interest of 0.12x dollars.
The 10% investment produce the interest of 0.10*(235000-x) dollars.
The total interest of 25000 dollars is the sum of the partial interests
0.12x + 0.10*(235000-x) = 25000.
It is your basic equation.
To solve it, express x from the equation and calculate
x =  = 75000.
ANSWER. 75000 dollars invested at 12%; the rest, (235000-75000) = 160000 dollars invested at 10%.
CHECK. 0.12*75000 + 0.10*160000 = 25000 dollars. ! Precisely correct !
Solved.
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It is a standard and typical problem on investments.
If you need more details, or if you want to see other similar problems solved by different methods, look into the lesson
- Using systems of equations to solve problems on investment
in this site.
You will find there different approaches (using one equation or a system of two equations in two unknowns), as well as
different methods of solution to the equations (Substitution, Elimination).
Also, you have this free of charge online textbook in ALGEBRA-I in this site
- ALGEBRA-I - YOUR ONLINE TEXTBOOK.
The referred lesson is the part of this online textbook under the topic "Systems of two linear equations in two unknowns".
Save the link to this online textbook together with its description
Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson
to your archive and use it when it is needed.
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