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Math Help - Linear Equations

  1. #1
    Amy
    Amy is offline
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    Question Linear Equations

    You plan to invest $25,000in two funds paying 3% and 4 % simple interest. (There is more risk in the 4 % fund.) Your goal is to obtain a total annual interest income of $1,000 from the investments. What is the smallest amount you can invest in the 4 % fund in order to meet your objective?

    How can we do this? How to make the equation/
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  2. #2
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    Quote Originally Posted by Amy View Post
    You plan to invest $25,000in two funds paying 3% and 4 % simple interest. (There is more risk in the 4 % fund.) Your goal is to obtain a total annual interest income of $1,000 from the investments. What is the smallest amount you can invest in the 4 % fund in order to meet your objective?

    How can we do this? How to make the equation/
    Hello,

    let x be the amount with 3% interest rate then

    (25000-x) is the amount with the 4.5% interest rate.

    Therefore you have to solve for x:

    0.03 \cdot x + 0.045 \cdot (25000-x) = 1000

    I've got $8,333.33. But please check my calculations!
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