A person invests $5000 in treasury notes and bonds. The notes pay 8% annual interest and the bonds pay 10% annual interest. If the annual in- come is $480, how much is invested in treasury notes?

1 Answer
Nov 20, 2016

Answer:

Investment in treasury notes is #$1000#.

Explanation:

Let the money invested in treasury notes be #$x#. Annual income on it at #8%# per annum for a year will be #8/100 xx x#.

Then money invested in bonds at #10%# would be #$(5000-x)# and annual income on it for a year will be #10/100 xx (5000-x)#.

As total yield is #480#, we have

#(8x)/100+(10(5000-x))/100=480# - multiplying both sides by #100#

or #8x+10(5000-x)=48000#

or #8x+50000-10x=48000#

or #-2x=48000-50000=-2000#

i.e. #x=-2000/-2=1000#

Hence, investment in treasury notes is #$1000#.