Betsy a recent retiree requires 6000 per year in extra incom

Betsy, a recent retiree, requires $6000 per year in extra income. She has $70000 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 $6000 in interest per year?

Solution

Let x = amount of invested in bonds

and (70,000-x) invested in CD .

0.15x+0.07(70,000-x)=6,000

0.15x+4900-0.07x=6000

0.08x= 6000 - 4900

x = 1100/0.08 = 13750

x= 13750 $ invested @ 15%

and 70000-13750 = 56250 $ amount invested @ 7 %

Check :
(0.15*13750) + (0.07*56250)=6000
6000=6000