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# A person invested \$20000 for one year, part at 8.5 percent

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Intern
Joined: 22 Sep 2004
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A person invested \$20000 for one year, part at 8.5 percent [#permalink]

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25 Feb 2005, 14:09
This topic is locked. If you want to discuss this question please re-post it in the respective forum.

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?

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Manager
Joined: 24 Jan 2005
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25 Feb 2005, 14:27
Well the answer is deposit the entire amount at 12.5% .

since 12.5% of 20,000 = 2500

Equation is

2500 = (8.5/100)*x + (12.5/100)*(20,000-x)

2500 = 2500 - 4x/100

=> x =0

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Intern
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25 Feb 2005, 14:31
You are missing something

The question asking for AT LEAST how much of the money is to be deposited at 12.5 percen

The minimum money needed

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Manager
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25 Feb 2005, 14:38
That's it 20,000

Suppose we deposit \$1000 at 8.5% and \$19,000 at 12.5%

Then the total interest is 85 + 2375 = 2460 < 2500

You can not deposit anything less than 20,000 for 12.5%

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VP
Joined: 25 Nov 2004
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25 Feb 2005, 21:00
let me reword the problem as under:

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?

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Manager
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28 Feb 2005, 15:11
Is that a new question? Or are you trying to rephrase the problem?
Anyway the answer is 20,000.

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SVP
Joined: 03 Jan 2005
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28 Feb 2005, 15:51
anirban16 wrote:
Is that a new question? Or are you trying to rephrase the problem?
Anyway the answer is 20,000.

It was a new question from MA, anirban. You can see the numbers are different. And you answer may not answer his question.

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Intern
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28 Feb 2005, 16:22
.125x + .085 (20000-x) = 2500

Solve for x, x = 20000
_________________

The biggest risk in life is not taking one!!!

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Director
Joined: 05 Jan 2005
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05 Mar 2005, 01:21
MA wrote:
let me reword the problem as under:

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

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Director
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05 Mar 2005, 11:27
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
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Praveen

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VP
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05 Mar 2005, 21:10
anirban16 wrote:
Is that a new question? Or are you trying to rephrase the problem? Anyway the answer is 20,000.

yes, it is rephrased-new question.

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05 Mar 2005, 21:10
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# A person invested \$20000 for one year, part at 8.5 percent

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