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The Problem

You are going to invest $25, 000, part at 14% and part at 16%. What is the most that can be invested at 14% in order to make at least $3,600 interest per year?

Answer provided by our tutors

let

x = amount invested at 14%

Interest earned in one year on this investment is 0.14x dollars.

Amount invested at 16% is 25000-x

Interest earned in one year on this investment is 0.16(25000-x) = 4000-0.16x dollars.

we want to find x in order to make at least $3,600 interest per year that is

interest for the part at 14% + interest for the part 16% >= total interest $3600

0.14*x + 4000 - 0.16*x >=3600

-0.02*x >=-400 multiply both sides by (-1)

x <= $20,000

$20,000 is the most that can be invested at 14% in order to make at least $3,600 interest per year.

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