James just retired, and has $720,000 to invest. A very safe Certificate of Deposit (CD) account pays 2%, while a riskier bond fund pays 6.5% in interest. James figures he needs $40,000 a year in interest to live on.

Algebra: Structure And Method, Book 1
(REV)00th Edition
ISBN:9780395977224
Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Chapter2: Working With Real Numbers
Section2.3: Rules For Addition
Problem 8P
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James just retired, and has $720,000 to
invest. A very safe Certificate of Deposit
(CD) account pays 2%, while a riskier bond
fund pays 6.5% in interest. James figures he
needs $40,000 a year in interest to live on.
How much should he invest in each
account to make enough interest while
minimizing his risk?
Transcribed Image Text:James just retired, and has $720,000 to invest. A very safe Certificate of Deposit (CD) account pays 2%, while a riskier bond fund pays 6.5% in interest. James figures he needs $40,000 a year in interest to live on. How much should he invest in each account to make enough interest while minimizing his risk?
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