Question

Ernest receives $555 per year from his $7000 investment in municipal and corporate bonds. His municipal bonds pay 6% and his corporate bonds pay 9%. How much money is invested in each type of bond

Answer 1

Solve these two equations for M and C, the amounts invested in munis and corporates, respectivly.

M + C = 7000
0.06M + 0.09 C = 555

Using substitution,

0.06M + 0.09*(7000 - M) = 555.
Rearranging the last equation,

0.03 M = 630 - 555 = 75

M = 75/0.03 = _____

C = 7000 - M = ____

Answer 2

M=2,500
C=4,500