Math Question

Question

If Ben invests $4500 at 4% interest per year, how much additional money must he invest at 5 1/2 % annual interest to ensure that the interest he receives each year is 4 1/2 % of the total amount invested?

Answer 1

The amount of interest he recveives from teh $4500 IS 0.04*4500 = $180

 

He then invests X dollars at 5.5%.  The amount  of interest he receives is 0.05*X

 

The total investment is X+4500.  He wants to recveive a total 4.5% return on this total amount = 0.045*(X+4500) = 0.045X+202.50 = $180 + 0.05X

Then 22.5 = 0.005X, or X = $4500

 

So he must invest an additional 4500