Question

to provide for retirement income, teresa puerto purchases a $6,000 bond that earns 6.5% annual simple interest. how much money does teresa have invested in bonds that earn 8% annual simple interest if the total annual interest earned from the two investments is $710?

Explanation:

Step1: Calculate the interest from the 6.5% bond

The interest formula for simple - interest is $I = Prt$. Since $t = 1$ year, for the $\$6000$ bond with a 6.5% (or 0.065) interest rate, the interest $I_1$ is $I_1=6000\times0.065=\$390$.

Step2: Calculate the interest from the 8% bond

Let the amount invested in the 8% (or 0.08) bond be $x$. The total interest from the two investments is $\$710$. We know that $I_1 + I_2=710$, where $I_1 = 390$. So the interest from the 8% bond $I_2=710 - 390=\$320$.

Step3: Find the amount invested in the 8% bond

Using the simple - interest formula $I = Prt$ with $t = 1$ year, $I_2 = 0.08x$. Since $I_2 = 320$, we can solve for $x$ by the equation $0.08x=320$. Dividing both sides by 0.08, we get $x=\frac{320}{0.08}=\$4000$.

Answer:

$4000$