SOLUTION: vincent and ricarda have invested $27,000 in bonds paying 5%. how much additional money should they invest in a certificate of deposit paying 2% simple interest so that the total a

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Question 904304: vincent and ricarda have invested $27,000 in bonds paying 5%. how much additional money should they invest in a certificate of deposit paying 2% simple interest so that the total annual return on the two investments will be 4%.
Answer by richwmiller(17219) About Me  (Show Source):
You can put this solution on YOUR website!
.04(27000)=1080
We know the total amount of money invested. $27000
x+y=27000,
We know that the total interest for the year for the two accounts is $1080
0.05*x+0.02*y=1080
x=27000-y
We substitute for x
0.05*(27000-y)+0.02*y=1080
We multiply out
1350-0.05y+0.02*y=1080
We combine like terms.
-0.03*y=-270
Isolate y
y=9000 at 2%
x=27000-y
Calculate x
x=18000 at 5%
We check
0.05*18000+0.02*9000=1080
900+180=1080
1080=1080
Since this statement is TRUE and neither amount is negative then it is ok