A lottery winner who is going to invest in utility bonds and a savings account using the following data: Assume that her total winnings are $ 800000, that the utility bonds will pay 7 percent per year, and that the savings account will pay 3 percent per year.
How much should she allocate to each investment in order for the yearly incomes from them to be the same?
Utility Bonds: $
Savings Account: $
What will be her total yearly income from these investments? $
2007-03-02 19:26:25 · 6 answers · asked by C 2 in Science & Mathematics ➔ Mathematics
why the heck would you do that ? just put everthing on the investement that pays most.
but if youy insist
x * 7/100 = y * 4/100
x+y=800000
solve this system and that is the solution.
2007-03-02 19:46:15 · answer #1 · answered by gjmb1960 7 · 0⤊ 0⤋
I'll do half and you do the rest. This is an equation in two unknowns. Let U = amount invested in utility bonds, and S = amount invested in savings bonds.
You already know U + S = 80,000
You also know the amount of income from the utility bonds will be = 0.07U; and the amount from savings bonds will be = 0.03S.
Last of all, the amounts of income are supposed to be the same, so you know that 0.07U = 0.03U
Ok, I did the hard part. You've got 2 equations and 2 unknowns and all you have to do is solve them for U and S.
This is the most basic kind of 2 unknown algebra problem, so, if you can't do the rest of this, you haven't mastered a basic building block and you're not going to understand a lot of what comes after. Make up your mind to get this worked through. It's not something mystical; it's just a logical way of understanding something and getting to an answer.
This is the point at which a lot of people make the decision that they're going to flip burgers the rest of their lives, rather than exert themselves a little and get an education. Go for it!
2007-03-03 03:50:28 · answer #2 · answered by L G 1 · 0⤊ 0⤋
lets x investment in utility bonds and y investment in savings
to have the same income in both
(7/100) x = (3/100)y or 7x =3y or x= 3y/7
and you have also x+y =800000
3y/7 +y = 800000 or 10y/7 = 800000
y =560000 an x = 800000-560000= 240000
the interest are for x = 240000*7/100= 1680$
for y it is the same so total interest = 3360$
2007-03-03 03:41:50 · answer #3 · answered by maussy 7 · 0⤊ 0⤋
Utility bonds: $240,000 = $16,800,00 @ 7%
Savings acount: $540,000,00 = $16,800,00 @ 3%
Total yearly income will be (Assuming none of the income is reinvested and cash is immedietly withdrawn) $33,600,00
2007-03-03 03:41:47 · answer #4 · answered by Roy W 2 · 0⤊ 0⤋
800000*7/100=56000 your utility bond
(56000)/3*100=1866667 your saving account
2007-03-03 03:50:50 · answer #5 · answered by Ali 5000 5 · 0⤊ 0⤋
i would answer you, but i'm too tired to do math... goodnight
2007-03-03 03:33:41 · answer #6 · answered by Your mom goes to college 3 · 0⤊ 1⤋