Levi just retired, and has $710,000 to invest. A very safe Certificate of Deposit...

[OAR]

I need the answer in less than two hours! I tried doing this in multiple ways and I can not figure this word problem out!

Levi just retired, and has $710,000 to invest. A very safe Certificate of Deposit (CD) account pays 1.5%, while a riskier bond fund pays 7% in interest. Levi figures he needs $43,000 a year in interest to live on. How much should he invest in each account to make enough interest while minimizing his risk?

 

[mmm4444bot]

Levi just retired, and has $710,000 to invest. A very safe Certificate of Deposit (CD) account pays 1.5%, while a riskier bond fund pays 7% in interest. Levi figures he needs $43,000 a year in interest to live on. How much should he invest in each account to make enough interest while minimizing his risk?

Hi there!

Both of the investments pay simple interest, yes?

It's not easy to quantify "risk" for an arbitrary bond fund, so I'm thinking that they simply want you to solve the system as usual and then start transferring pennies from the bond investment to the CD -- until the interest no longer rounds to 43000.

You shouldn't need to check more than a dozen variations or so.

I tried doing this in multiple ways

Can you show us one way that you tried (ignoring the risk factor, for now), to earn $43000 in interest? :cool: