Is this homework or real life?
The formula for your problem is (x*.07)+(y*.11)=12,300; and x+y=130,000.
solve for x, x=50k, y=80k
therefore you want $50,000 in cd at 7% plus $80,000 in AA bonds at 11%.
Rates have dropped. old text book.
You have to solve this formula....
[X * .07 ] + [(130,000 - X) * .11] = 12,300
X=amount in Certs, 130,000-x = amt in AA bonds.
Solving....
.07x + 14300 - .11x = 12300
.04x = 2000
x = 50,000 = Certs.
AA bonds = 80,000
PROOF:
50,000 * .07 = $3,500
80,000 * .11 = $8,800
TOTAL = $12,300
A retired couple has $130,000 to invest to obtain annual income. They want some of it invested in safe Certificates of deposit yielding 7%. The rest they want to invest in AA bonds yielding 11% per year. How much should they invest to realize exactly $12,300 per year?
