Question: After 2 years, Betsy (see Problem 19 ) finds that she will now require $2700 per year. Assuming that the remaining information is the same,

After 2 years, Betsy (see Problem 19 ) finds that she will now require $2700 per year. Assuming that the remaining information is the same, how should the money be reinvested?

Data from problem 19

Betsy, a recent retiree, requires $2100 per year in extra income. She has $50,000 to invest and can invest in B-rated bonds paying 6% per year or in a certificate of deposit (CD) paying 1.2% per year. How much money should Betsy invest in each to realize exactly $2100 in interest per year.

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In Problem 19 we found that Betsy should invest 30000 in Brated bonds and 20000 in a certificate of ... View full answer

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