Requires 5,000 per year in extra income. She has 60,000 to invest in b-rated bonds paying 15% per year or in a cd deposit paying 7% per year. How much money should be invested in each to realize exactly 5,000 in interest per year

she invested $10000 on the in b-rated bonds.

she invested $50000 in a cd deposit

Step-by-step explanation:

Let x represent the amount invested in b-rated bonds paying 15% per year.

Let y represent the amount invested in a cd deposit paying 7% per year.

She has 60,000 to invest in b-rated bonds paying 15% per year or in a cd deposit paying 7% per year. This means that

x + y = 60000

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest on the investment.

P represents the principal or amount invested.

R represents interest rate

T represents the duration of the investment in years.

Considering the amount invested in b-rated bonds paying 15% per year.,

P = x

R = 15

T = 1 year

I = (x × 15 × 1)/100 = $0.15x

Considering the amount invested in a cd deposit paying 7% per year.,

P = y

R = 7

T = 1 year

I = (y × 7 × 1)/100 = $0.07y

In order to realize exactly 5,000 in interest per year, then

0.15x + 0.07y = 5000 - - - - - - 1

Substituting x = 60000 - y into equation 1, it becomes

0.15(60000 - y) + 0.07y = 5000

9000 - 0.15y + 0.07y = 5000

- 0.15y + 0.07y = 5000 - 9000

- 0.08y = - 4000

y = - 4000/- 0.08

y = 50000

x = 60000 - y = 60000 - 50000

x = $10000