Expert: Richard J. Raridon - 9/29/2008

Question
QUESTION: Hello:

An investor has $1,000.00 to invest. He wants to invest one amount at 5% and another at 2%. What must the 1000.00 be divided into so the the total return from is $44.00?

Can you try to solve this by using a weighted average?

My age is in the 50 to 60 age group.

Answers: $800.00 @ 5% = $40.00 and $200 @ 2% = $4.00.

ANSWER: Let x = amt. invested at 5% and y = amt. invested at 2%
then x+y = 1000 and 0.05x+0.02y = 44
so x = 800 and y = 200

---------- FOLLOW-UP ----------

QUESTION: Hello:

I do not know how to solve an algebra equation that has two different variables, x and y.
Can you explain?

Answer
You can either use substitution or addition and subtraction.  In this case, I multiplied the 1st eq. by 2 to get 2x+2y = 2000 and the 2nd eq. by 100 to get 5x+2y = 4400
Now if you subtract 2x+2y = 2000 from 5x+2y = 4400, you get 3x=2400
giving you x = 800 and then, y = 200
You could have also written the 1st eq. as x = 1000-y and then substituted that into the 2nd eq. to get 0.05(1000-y) +0.02y = 44.
Solve for y and then x.