A retired woman has $50,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% simple annual interest. The rest of it she wants to put in a CD that pays 7% simple interest. a) Let x be the amount the woman invests in the 15% bond. Write an expression, in terms of x, that tells how much the woman invests in the CD.

A retired woman has $50,000 to invest but needs to make $6,000 a year from the interest to meet certain living expenses. One bond investment pays 15% simple annual interest. The rest of it she wants to put in a CD that pays 7% simple interest. a) Let x be the amount the woman invests in the 15% bond. Write an expression, in terms of x, that tells how much the woman invests in the CD.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A retired woman has $50,000 to invest but needs to make $6,000 a year from the interest
to meet certain living expenses. One bond investment pays 15% simple annual interest.
The rest of it she wants to put in a CD that pays 7% simple interest.
a) Let x be the amount the woman invests in the 15% bond. Write an expression, in terms
of x, that tells how much the woman invests in the CD.
b) Set up an equation that can be used to determine how much the woman should invest
in each option to earn $6,000 per year in interest.
c) Solve the equation from part b) to determine how much should be invested in each
option.

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