Question 403805: Betsy, a recent retiree, requires $6,000 per year in extra income. She has $60,000 to invest and can invest in B-rated bonds paying 15% per year or in a certificate of deposit (CD) paying 5% per year. How much money should be invested in each to realize exactly $6,000 in interest per year?
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! requires $6,000 per year in extra income.
She has $60,000 to invest and can invest in B-rated bonds paying 15% per year
or in a certificate of deposit (CD) paying 5% per year.
How much money should be invested in each to realize exactly $6,000 in interest per year?
:
Let b = amt to be invested in bonds
Let c = amt in CD's
:
b + c = 60000
c = (60000-b)
:
.15b + .05c = 6000
replace c with (60000-b)
.15b + .05(60000-b) = 6000
.15b + 3000 - .05b = 6000
.15b - .05b = 6000 - 3000
.10b = 3000
b = 
b = $30,000 invested in bonds
and
c = 60000 - 30000
c = $30,000 invested in CD's
:
;
See if that checks out
.15(30000) = 4500
.05(30000) = 1500
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total amt: 6000
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