SOLUTION: Investment
You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest. YOur goal is to obtain a total annual interest income of $1,000 from the investments. What
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You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest. YOur goal is to obtain a total annual interest income of $1,000 from the investments. What
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Question 84984: Investment
You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest. YOur goal is to obtain a total annual interest income of $1,000 from the investments. What is the smallest amount you can invest in the 4 1/2 % fund in order to meet your objective?
The answer is $16,666.67 I want someone else to work this one to see if I worked it right.....thanks! Found 2 solutions by stanbon, josmiceli:Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! You plan to invest $25,000 in two funds paying 3% and 4 1/2% simple interest. YOur goal is to obtain a total annual interest income of $1,000 from the investments. What is the smallest amount you can invest in the 4 1/2 % fund in order to meet your objective?
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A(t) = P(1+rt)
Let x be amount invested at 3%; interest = 0.03x
Amount invested at 4 1/2% is (25000-x); interest on this is 0.045(25000-x)
= 1125-0.045x
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EQUATION:
interest + interest = 1000
0.03x + 1125-0.045x = 1000
-0.015x = -125
x = $83333.33 (amt invested at 3%)
25000-x = $16,666.67 (amt invested at 4 1/2%)
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Cheers,
Stan H.
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