Question

Betsy, a recent retiree, requires $6,000 per year in extra income. She has $70,000 to invest and can invest in B-rated bonds paying 17% per year or in a CD paying 7% per year. How much money should be invested in each to realize exactly $6,000 in interest per year?

I do not know what to do for this.

Answer 1

ok, so Betsy invest part of her $70,000 in B-rate bonds paying 17% per year
.17x

the rest of the $70,000 she invest in a CD paying 7% per year
.07(70000-x)

totally she wants to get $6,000 per year
= 6000

putting this all together:
.17x + .07(70000-x) = 6000

solve for x. that will give how much she invested in B-rated bonds. plug that in 70000-x to find how much she invested in a CD

Answer 2

$11,000