Please help!

Question

A total of $54,000 is invested in two municipal bonds that pay 5.25% and 7.25% simple interest. The investor wants an annual interest income of $3355 from the investments. What amount should be invested in the 5.25% bond?

Answer 1

Hi Blake,

 

Let X = investment in 5.25% bond

 

Let Y = investment in 7.25% bond

 

X + Y = 54000

 

.0525X + .0725Y = 3355

 

Substitute 54000 - X for Y-->0.0525X + 0.0725(54000 - X) = 3355

 

.0525X + 3915 - .0725X = 3355

 

-0.02X = -560

 

X = $28000

 

Plug the investment numbers into the question to make sure the answer is correct.

 

Have fun.

 

Dan