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A person invested $20000 for one year, part at 8.5 percent [#permalink]
25 Feb 2005, 13:09

A person invested $20000 for one year, part at 8.5 percent simple annual interest and part at 12.5 percent simple annual interest. For a $2500 interest, at least how much of the money is to be deposited at 12.5 percent?

A has $20,000.00. He/she has two options to make his/her investment: Bond X offers 10% annual coupon intrate rate and Bond Y offers 15% annual coupon interest rate. A plans to make an income of $4500, how much should he invest in X and Y?

A has $20,000.00. He/she has two options to make his/her investment: Bond X offers 10% annual coupon intrate rate and Bond Y offers 15% annual coupon interest rate. A plans to make an income of $4500, how much should he invest in X and Y?

What am I doing wrong here?

Let's say Mr A. allocated $X and $Y for bond X and Y resp.

0.1x + 0.15y = 4500 (sum of interests for 1 year)
x + y = 20000 (sum of money invested should be 20,000)

I solve for x and y and i get y = 50K and x = -30K

Arsene_Wenger
you are right in your approach, your answer just means that this made up problem is not solvable. I am sure MA was just trying to convey basic concept behind this problem. If you change 20000 to some number heigher than 50000 problem is solvable _________________