SOLUTION: A retired woman has $60,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% annual interest. The rest of i

Algebra ->  Coordinate Systems and Linear Equations  -> Linear Equations and Systems Word Problems -> SOLUTION: A retired woman has $60,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% annual interest. The rest of i      Log On


   

Question 1016197: A retired woman has $60,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% annual interest. The rest of it she wants to put in a CD that pays 7%.
Set up and solve the equation for how much the woman should invest in each option to sustain exactly a $6,000 annual return.
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
x=bond paying 15%
60,000-x = CD paying 7%
(you can use x and y, but this way uses one variable).
.15x+.07x(60000-x)=6000
.15x+4200-.07x=6000
0.08x=1800
x=22,500
60000-x=37,500
$22500 at 15% pays $3375
$37,500 at 7% pays $2625
They add to $6000