A retired couple has $\$ 130,000$ to invest to obtain annual income. They want some of it invested in safe Certificates of Deposit yielding 6\%. The rest they want to invest in AA bonds yielding $11 \%$ per year. How much should they invest in each to realize exactly $\$ 11,800$ per year?

Question

Quizplus · Accepted Answer

Let $x$ be the amount invested in AA bonds at $11\%$, and $y$ be the amount invested in CDs at $6\%$. We have two equations: $x + y = 130,000$ (total investment) and $0.11x + 0.06y = 11,800$ (total income). Solving these equations simultaneously, we find $x = 80,000$ and $y = 50,000$.

A Retired Couple Has $130,000\$ 130,000$130,000 To Invest to Obtain Annual Income

A Retired Couple Has $\$ 130,000$ To Invest to Obtain Annual Income