SOLUTION: Vern sold his 1964 Ford Mustang for $55,000 and wants to invest the money to earn him 6.4% interest per year. He will put some of the money into Fund A that earns 4% per year and t
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-> SOLUTION: Vern sold his 1964 Ford Mustang for $55,000 and wants to invest the money to earn him 6.4% interest per year. He will put some of the money into Fund A that earns 4% per year and t
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Question 1190055: Vern sold his 1964 Ford Mustang for $55,000 and wants to invest the money to earn him 6.4% interest per year. He will put some of the money into Fund A that earns 4% per year and the rest in Fund B that earns 10% per year. How much should he invest into each fund (in dollars) if he wants to earn 6.4% interest per year on the total amount? Answer by ikleyn(52775) (Show Source):
You can put this solution on YOUR website! .
Vern sold his 1964 Ford Mustang for $55,000 and wants to invest the money to earn him 6.4% interest
per year. He will put some of the money into Fund A that earns 4% per year and the rest in Fund B
that earns 10% per year. How much should he invest into each fund (in dollars) if he wants to earn
6.4% interest per year on the total amount?
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He invests $55000 partly at 10% and partly at 4%.
Let x dollars be the amount invested at 10%;
then the amount invested at 4% is (55000-x) dollars.
The total annual interest equation is
0.1x + 0.04*(55000-x) = 0.064*55000.
From this equation
x = = 22000.
ANSWER. $22000 shoud be invested at 10%, and the rest 55000-22000 = 33000 dolars invested at 4%.
CHECK. 0.1*22000 + 0.04*33000 = 3520, the same as 0.064*55000 = 3520. ! 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).
