You have 250,000 in an ira at the time you retire. you have the option of investing this money in two funds. fund a pays 1.2% annually and fund b pays 6.2% annually. how should you divide your money between fund a and fund b to produce and annual interest income of $8,000?

Let x be the amount of money, you fund in Fund A and y be the amount of mone yyou fund in Fund B.

1. You have 250,000 In an IRA at the time you retire and want to invest this money into Funds A and B, then

2. Fund A pays 1.2% (as a decimal 1.2% is 0.012) annually, then is annual interest income in Fund A.

Fund B pays 6.2% (as a decimal 6.2% is 0.062) annually, then is annual interest income in Fund B.

Since Fund A and Fund B produce an annual interest income of $8,000, then

3. Solve the system of equations:

Express x from first equation and substitute it into the second equation

Multiply this equation by 1000:

Then

you have to fund $150,000 in Fund A and $100,000 in Fund B.

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step-by-step explanation:

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