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Can someone help me solve this word problem? I don't understand it.? |
A middle-aged married couple project they will need $12000 per year to supplement their Social Security. They have $150,000 to invest to obtain this income. They have decided on two investment options: AA Bonds yielding 10% per year and a Bank Certificate yielding 5%. How much should be invested in each option in orderto earn the $12000? depends on the number of years they have to invest The question is asking how much they will need to invest in AA bonds and how much they will need to invest in a bank certificate in order to earn 12,000 in interest each year. You first have to figure out what percentage of 150,000 12,000 is. Once you have the percentage of interest they need to earn then you can figure out how much of their 150,000 they will need to invest in each in order to earn the 12,000 they need to supplement their social security income. to get 12000 before tax invest 90000 at 10% and 60000 at 5% |
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