Sachi has $25,000 to invest. Her financial planner suggests that she diversify h
ID: 3032683 • Letter: S
Question
Sachi has $25,000 to invest. Her financial planner suggests that she diversify her investment into three investment categories: Treasury bills that yield 3% simple interest annually, municipal bonds that yield 5% simple interest annually, and corporate bonds that yield 9% simple interest annually. Sachi would like to earn $1210 per year in income. In addition, Sachi wants her investment in Treasury bills to be $7000 more than her investment in corporate bonds. How much should Sachi invest in each investment category?Explanation / Answer
Dear Student Thank you for using Chegg !! Let Sachi's investment in 3 categories be X,y,Z respectively as below Investment Detail Investment Amount Rate Of Interest Interest Earned Treasury Bill X 3% 0.03X Municipal Bonds Y 5% 0.05Y Corporate Bonds Z 9% 0.09Z Total Investment = 25000 $ X + Y + Z = 25000 0.03X + 0.05Y + 0.09Z =1210 X = 7000 + Z (GIVEN) => 7000 + Y + 2Z = 25000 Y + 2Z = 18000 (A) 210 + 0.05Y + 0.12Z = 1210 0.05Y + 0.12Z = 1000 (B) Multiply equation A by 0.05 and subtracting B -0.02Z = -100 Z = 5000$ X = 12000 Y = 8000$ ANSWER
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