An equation is formed of two equal expressions. Julian should invest $160,000 in CD and $640,000 in Bond.
What is an equation?
An equation is formed when two equal expressions are equated together with the help of an equal sign '='.
Let the amount invested in CD be represented by x, while the amount invested in bond be represented by y. The total amount that Julian had is,
x + y = 800,000
x = 800,000 - y
The interest that Julian needs in a year is $36,000. Therefore, the total interest should be,
0.025x + 0.05y = 36000
0.025(800,000 - y) + 0.05y = 36000
20,000 - 0.025y + 0.05y =36,000
0.025y = 16,000
y = $640,000
Substitute the value of y
x + y = 800,000
x = $160,000
Hence, Julian should invest $160,000 in CD and $640,000 in Bond.
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