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Question 280808: A financial service recommends that a client purchase a corporate bond for $15,000 that earns 6% annual simple interest. How much additional money must be placed in U.S. governments securities that earn a simple interest rate of 3.5% so that the total annual interest earned from the two investments is 5% of the total investment?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A financial service recommends that a client purchase a corporate bond for $15,000 that earns 6% annual simple interest. How much additional money must be placed in U.S. governments securities that earn a simple interest rate of 3.5% so that the total annual interest earned from the two investments is 5% of the total investment?
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Equation:
interest + interest = interest
0.06*15000 + 0.035x = 0.05(x+15000)
Multiply thru by 1000 and solve for "x":
60*15000 + 35x = 50x + 50*15000
10*15000 = 15x
x = $10,000 (amt. he should invest in U.S. gov. securities.
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Cheers,
Stan H.
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