Math Problem Statement

A retired woman has $80,000 to invest but needs to make $3,000 a year from the interest to meet certain living expenses. One bond investment pays 15% annual interest. The rest of it she wants to put in a CD that pays 7%.

If we let x be the amount the woman invests in the 15% bond, how much in dollars will she be able to invest in the CD?

Solution

To solve this problem, we need to set up a system of equations based on the given information:

  1. Let xx represent the amount the woman invests in the 15% bond.
  2. The total investment amount is $80,000, so the amount she invests in the CD is 80,000x80,000 - x.

Next, we can calculate the annual interest from each investment:

  • The interest from the bond investment is 0.15x0.15x (15% of the amount invested in the bond).
  • The interest from the CD investment is 0.07(80,000x)0.07(80,000 - x) (7% of the amount invested in the CD).

The total interest she needs is $3,000 per year. So, we can set up the following equation:

0.15x+0.07(80,000x)=3,0000.15x + 0.07(80,000 - x) = 3,000

Now, let's solve for xx:

0.15x+0.07(80,000x)=3,0000.15x + 0.07(80,000 - x) = 3,000

Distribute the 0.07 on the right-hand side:

0.15x+0.07(80,000)0.07x=3,0000.15x + 0.07(80,000) - 0.07x = 3,000

0.15x+5,6000.07x=3,0000.15x + 5,600 - 0.07x = 3,000

Combine the like terms:

(0.15x0.07x)+5,600=3,000(0.15x - 0.07x) + 5,600 = 3,000

0.08x+5,600=3,0000.08x + 5,600 = 3,000

Subtract 5,600 from both sides:

0.08x=3,0005,6000.08x = 3,000 - 5,600

0.08x=2,6000.08x = -2,600

Now, solve for xx:

x=2,6000.08x = \frac{-2,600}{0.08}

x=32,500x = -32,500

This negative value suggests there may have been an error in either the interpretation or the input problem. Please check the conditions or clarify so we can resolve any issues

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Math Problem Analysis

Mathematical Concepts

Algebra
Linear Equations

Formulas

Total Interest = Interest from Bond + Interest from CD
0.15x + 0.07(80,000 - x) = 3,000

Theorems

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Suitable Grade Level

Grades 9-11