A $\$ 134,000$ trust is to be invested in bonds paying $7 \%$, CDs paying $6 \%$, and mortgages paying $10 \%$. The bond and CD investment together must equal the mortgage investment. To earn a $\$ 11,130$ annual income from the investments, how much should the bank invest in bonds?
A) $\$ 41,000$
B) $\$ 26,000$
C) $\$ 39,000$
D) $\$ 67,000$

Question

Quizplus · Accepted Answer

The total investment is \$134,000, and the desired annual income is \$11,130. Let's denote the amount invested in bonds, CDs, and mortgages as B, C, and M, respectively. We have two conditions: B + C = M, and the total investment is B + C + M = \$134,000. The annual income from these investments is 0.07B + 0.06C + 0.10M = \$11,130. Using the condition B + C = M, we can substitute M in the total investment equation and the income equation to solve for B, which leads to the correct answer of \$41,000.

A $134,000\$ 134,000$134,000 Trust Is to Be Invested in Bonds Paying 7%7 \%7%

A $\$ 134,000$ Trust Is to Be Invested in Bonds Paying $7 \%$