Word problem

Question

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 7% per year. How much money should be invested in each to realize exactly $6,000 in interest per year?

 

The amount of money invested at 15% = $

The amount of money invested at 7% = $

Answer 1

a + b = 60,000 -----> a = 60,000 - b

.15a + .07b = 6000

 

Substitute!

 

.15(60,000 - b) + .07b = 6000

9000 - .15b + .07b = 6000

.08b = 3000

b = 37,500

 

a = 60,000 - 37,500

a = 22,500