SOLUTION: A retired couple has $380,000 to invest. They chose one relatively safe investment
fund that has an annual yield of 5% and a riskier investment with an annual yield of 10%. How m
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fund that has an annual yield of 5% and a riskier investment with an annual yield of 10%. How m
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Question 1185194: A retired couple has $380,000 to invest. They chose one relatively safe investment
fund that has an annual yield of 5% and a riskier investment with an annual yield of 10%. How much should they investment in each fund to earn $20,000 per year? Answer by ikleyn(52794) (Show Source):
Let x be the amount invested at 10%;
then the amount invested at 5% is (380000-x) dollars.
Then the total interest equation to find x is
0.1x + 0.05(380000-x) = 20000.
From the equation
x = = 20000.
ANSWER. $20000 should be invested at 10% and the rest amount, (380000-20000) = 360000 should be invested at 5%.
CHECK. 0.1*20000 + 0.05*360000 = 20000 dollars, total annual interest. ! Correct !
Solved.
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It is a standard and typical problem on investments.
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).
