### Home > CCA2 > Chapter Ch5 > Lesson 5.2.1 > Problem5-65

5-65.

A woman plans to invest x dollars. Her investment counselor advises her that a safe plan is to invest $30\%$ of that money in bonds and $70\%$ in low risk stocks. The bonds currently have a simple interest rate of $7\%$ and the stock has a dividend rate (like simple interest) of $9\%$. Homework Help ✎

1. Write an expression for the annual income that will come from the bond investment.

Since she will invest $30\%$ of $x$ dollars in bonds $0.3x$ represents the money she has in bonds.
Since she makes $7\%$ interest on the bonds, multiply that amount by $0.07$.

$B=0.07(0.3x)\ \text{or}\ B=0.021x$

2. Write an expression for the annual income that will come from the stock investment.

Refer to part (a).

3. Write an equation and solve it to find out how much the client needs to invest to have an annual income of \$5,000.

$B+S=0.084x$

$0.084x=5000$