An inheritance of $40,000 is invested in two municipal bonds which pay 6% and 7% simple annual interest. If the annual interest from both bonds is $2,550 how much is invested at each rate?
Let x be the amount invested in 6% bonds, so 40000-x is the amount in 7%.
x*0.06+(40000-x)*0.07=2550
Solve for x.
25,000 @ 6%
15,000 @ 7%
To solve this problem, we can use a system of equations.
Let's say the amount invested at 6% is x dollars.
Since the total amount of inherited money is $40,000, the amount invested at 7% would be (40,000 - x) dollars.
The annual interest from the 6% bond would be: 0.06x dollars.
The annual interest from the 7% bond would be: 0.07(40,000 - x) dollars.
According to the problem, the total annual interest is $2,550, so we can set up the following equation:
0.06x + 0.07(40,000 - x) = 2,550.
Now let's solve this equation step by step:
0.06x + 0.07(40,000 - x) = 2,550.
0.06x + 2,800 - 0.07x = 2,550.
-0.01x = -250.
x = -250 / -0.01.
x = 25,000.
Therefore, $25,000 is invested at 6% and (40,000 - 25,000) = $15,000 is invested at 7%.