# Thread: Financial Planning Part 2

1. ## Financial Planning Part 2

After two years, Betsy finds that she will require 7000 dollars per year in extra income in terms of retirement. She has 50,000 dollars to invest and can invest in B-rated bonds paying 15 percent per year or in a certificate of deposit paying 7 percent per year. How much money should be invested in each to realize exactly 6000 dollars in interest per year?

This question, we can say, is part 2 of a question posted several days ago by the title Financial Planning. I figured that we simply change 6000 to 7000 in the equation set up.

(50,000 - x)(0.15) + x(0.07) = 7000

Correct?

2. ## Re: Financial Planning Part 2

Don't you think that 6000 dollars is a typo: should be 7000 ?

3. ## Re: Financial Planning Part 2

Originally Posted by DenisB
Don't you think that 6000 dollars is a typo: should be 7000 ?
I see the typo. Is the correct equation
(50,000 - x)(0.15) + x(0.07) = 7000 for this application?

4. ## Re: Financial Planning Part 2

Yes. You should end up with 43750@15% and 6250@7%

5. ## Re: Financial Planning Part 2

(50,000 - x)(0.15) + x(0.07) = 7000

7500 - 0.15x + x(0.07) = 7000

-0.15x + x(0.07) = 7000 - 7500

-0.08x = -500

x = -500/-0.08

x = 6250

50,000 - 6250 = 43,750

Yes, 6250 at 7 percent and 43,750 at 15 percent.

6. ## Re: Financial Planning Part 2

[QUOTE=harpazo;941598

Yes, 6250 at 7 percent and 43,750 at 15 percent.[/QUOTE]

harpazo, you did not write the answers with the correct units, that being of U.S. currency. You need to post them as one of these equivalents:

6,250 dollars at 7 percent

43,750 dollars at 15 percent

- - - - - - - - - - - or - - - - - - - - - - - - -

$6,250 at 7%$43,750 at 15%

7. ## Re: Financial Planning Part 2

Originally Posted by greg1313
harpazo, you did not write the answers with the correct units, that being of U.S. currency. You need to post them as one of these equivalents:

6,250 dollars at 7 percent

43,750 dollars at 15 percent

- - - - - - - - - - - or - - - - - - - - - - - - -

$6,250 at 7%$43,750 at 15%
Yes, I forgot the units.