SOLUTION: Theresa earns a full athletic scholarship for college so her parents have given her the $20.000 they had saved to pay for her college tuition. she decides to invest that money with

Algebra ->  Equations -> SOLUTION: Theresa earns a full athletic scholarship for college so her parents have given her the $20.000 they had saved to pay for her college tuition. she decides to invest that money with      Log On


   

Question 1092113: Theresa earns a full athletic scholarship for college so her parents have given her the $20.000 they had saved to pay for her college tuition. she decides to invest that money with an overall goal of earning 11% interest. she wants to put some of the money in a low-risk investment that has been earning 8% a year and the rest of the money in a medium risk investment that typically earns 12% a year. how much money should she put in each investment to reach her goal?
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
x is invested at 8%, so interest per year is 0.08x.
20000-x is the rest invested at 12%, so interest per year is (20000-x)(0.12)=2400-0.12x
This has to equal the amount of interest gained for 20000*0.11=2200
Therefore, 0.08x+2400-0.12x=2200
-0.04x=-200
multiply both sides by -25
x=$5000 @8% or $400
20000-x=$15000@12%=$1800
They add to $2200, which is 11% of $20000.