Question:

Investment word problem help?

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If a boy invests $4000 at 4% interest per year, how much additional money must he invest at 5.5% annual interest to ensure that the interest he receives each year is 4.5% of the total amount invested?

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  1. He would have to invest an additional $2,000 @ 5.5% to average 4.5% annual interest on the total invested.

    $4,000 @ 4% = $160 annual interest

    $2,000 @ 5.5% = $110 annual interest

    $270 return on $6,000 invested = 4.5% (270/6000)

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