4. You have $55000 to invest, and two funds you would like to invest in. The You-Risk-It Fund yields 13% interest. The Extra-Dull Fund yields 7% interest. Because of the college financial aid implications, you don’t think you can afford to earn more than $6500 in interest income this year. How should you put in each fund?

Question

4.	You have $55000 to invest, and two funds you would like to invest in. The You-Risk-It  Fund yields 13% interest. The Extra-Dull Fund yields 7% interest. Because of the college financial aid implications, you don’t think you can afford to earn more than $6500 in interest income this year. How should you put in each fund?

drwls · Answer

Let X be the amount invested at 13% interest Let Y be the amount invested at 7% interest 0.13X + 0.07 Y = 6500 (maximum without financial aid penalty) X + Y = 55,000 0.13X + 0.13Y = 7150 0.06Y = 650 Y = 10,833.33 at 7% X = 44,166.67 at 13%